Apartment Investment and Management 10K 2006 Annual report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K


(Mark One)
þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the fiscal year ended December 31, 2006
or
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from to

Commission File Number 1-13232

Apartment Investment and Management Company

(Exact name of registrant as specified in its charter)


Maryland		84-1259577
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
4582 South Ulster Street Parkway, Suite 1100 Denver, Colorado (Address of principal executive offices)		80237 (Zip Code)

Registrant’s telephone number, including area code:(303) 757-8101

Securities Registered Pursuant to Section 12(b) of the Act:


Title of Each Class		Name of Each Exchange on Which Registered

Class A Common Stock		New York Stock Exchange
Class G Cumulative Preferred Stock		New York Stock Exchange
Class T Cumulative Preferred Stock		New York Stock Exchange
Class U Cumulative Preferred Stock		New York Stock Exchange
Class V Cumulative Preferred Stock		New York Stock Exchange
Class Y Cumulative Preferred Stock		New York Stock Exchange

Securities Registered Pursuant to Section 12(g) of the Act: none

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act. Yes þ No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 ofRegulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of thisForm 10-K or any amendment to thisForm 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” inRule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ Accelerated filer o Non-accelerated filer o

Indicate by check mark whether the registrant is a shell company (as defined inRule 12b-2 of the Act). Yes o No þ

The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant, was approximately $4.1 billion as of June 30, 2006. As of February 23, 2007, there were 97,577,459 shares of Class A Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement to be issued in conjunction with the registrant’s annual meeting of stockholders to be held April 30, 2007 are incorporated by reference into Part III of this Annual Report.

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

TABLE OF CONTENTS

ANNUAL REPORT ONFORM 10-K
For the Fiscal Year Ended December 31, 2006


Item			Page

PART I
	1.	Business		2
	1A.	Risk Factors		9
	1B.	Unresolved Staff Comments		15
	2.	Properties		16
	3.	Legal Proceedings		17
	4.	Submission of Matters to a Vote of Security Holders		17

PART II
	5.	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		18
	6.	Selected Financial Data		21
	7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		23
	7A.	Quantitative and Qualitative Disclosures About Market Risk		39
	8.	Financial Statements and Supplementary Data		40
	9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure		40
	9A.	Controls and Procedures		41
	9B.	Other Information		43

PART III
	10.	Directors, Executive Officers and Corporate Governance		43
	11.	Executive Compensation		43
	12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		44
	13.	Certain Relationships and Related Transactions, and Director Independence		44
	14.	Principal Accountant Fees and Services		44

PART IV
	15.	Exhibits and Financial Statement Schedules		45
Fourth Amended and Restated Agreement of Limited Partnership
List of Subsidiaries
Consent of Independent Registered Public Accounting Firm
Certification of CEO Pursuant to Section 302
Certification of CFO Pursuant to Section 302
Certification of CEO Pursuant to Section 906
Certification of CFO Pursuant to Section 906
Agreement re: Disclosure of Long-Term Debt Instruments

FORWARD-LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements in certain circumstances. Certain information included in this Report contains or may contain information that is forward-looking, including, without limitation, statements regarding the effect of acquisitions and redevelopments, our future financial performance, including our ability to maintain current or meet projected occupancy, rent levels and same store results, and the effect of government regulations. Actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation: natural disasters such as hurricanes; national and local economic conditions; the general level of interest rates; energy costs; the terms of governmental regulations that affect us and interpretations of those regulations; the competitive environment in which we operate; financing risks, including the risk that our cash flows from operations may be insufficient to meet required payments of principal and interest; real estate risks, including variations of real estate values and the general economic climate in local markets and competition for residents in such markets; acquisition and development risks, including failure of such acquisitions to perform in accordance with projections; the timing of acquisitions and dispositions; litigation, including costs associated with prosecuting or defending claims and any adverse outcomes; and possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by us. In addition, our current and continuing qualification as a real estate investment trust involves the application of highly technical and complex provisions of the Internal Revenue Code and depends on our ability to meet the various requirements imposed by the Internal Revenue Code, through actual operating results, distribution levels and diversity of stock ownership. Readers should carefully review our financial statements and the notes thereto, as well as the section entitled “Risk Factors” described in Item 1A of this Annual Report and the other documents we file from time to time with the Securities and Exchange Commission.

PART I


Item 1.	*Business*

The Company

Apartment Investment and Management Company, or Aimco, is a Maryland corporation incorporated on January 10, 1994. We are a self-administered and self-managed real estate investment trust, or REIT, engaged in the acquisition, ownership, management and redevelopment of apartment properties. As of December 31, 2006, we owned or managed a real estate portfolio of 1,256 apartment properties containing 216,413 apartment units located in 46 states, the District of Columbia and Puerto Rico. Based on apartment unit data compiled by the National Multi Housing Council, as of January 1, 2006, we were the largest owner of apartment properties in the United States. Our portfolio includes garden style, mid-rise and high-rise properties.

We own an equity interest in, and consolidate the majority of, the properties in our owned real estate portfolio. These properties represent the consolidated real estate holdings in our financial statements, which we refer to as consolidated properties. In addition, we have an equity interest in, but do not consolidate for financial statement purposes, certain properties that are accounted for under the equity method. These properties represent our investment in unconsolidated real estate partnerships in our financial statements, which we refer to as unconsolidated properties. Additionally, we manage (both property and asset) but do not own an equity interest in other properties, although in certain cases we may indirectly own generally less than one percent of the operations of such

properties through a partnership syndication or other fund. Our equity holdings and managed properties are as follows as of December 31, 2006:


	Total Portfolio
	Properties		Units

Consolidated properties		703		162,432
Unconsolidated properties		102		11,791
Property management for third parties		41		3,573
Asset management for third parties		410		38,617

Total		1,256		216,413

Since our initial public offering in July 1994, we have completed numerous transactions, expanding our portfolio of owned or managed properties from 132 properties with 29,343 apartment units to 1,256 properties with 216,413 apartment units as of December 31, 2006. These transactions have included purchases of properties and interests in entities that own or manage properties, as well as corporate mergers.

Except as the context otherwise requires, “we,” “our,” “us” and the “Company” refer to Aimco, the Aimco Operating Partnership and their consolidated entities, collectively. As used herein, and except where the context otherwise requires, “partnership” refers to a limited partnership or a limited liability company and “partner” refers to a limited partner in a limited partnership or a member in a limited liability company.

Available Information

Our Annual Report onForm 10-K, our Quarterly Reports onForm 10-Q, our Current Reports onForm 8-K and any amendments to any of those reports that we file with the Securities and Exchange Commission are available free of charge as soon as reasonably practicable through our website at www.aimco.com. The information contained on our website is not incorporated into this Annual Report. Our Common Stock is listed on the New York Stock Exchange under the symbol “AIV.” In 2006, our chief executive officer submitted his annual corporate governance listing standards certification to the New York Stock Exchange, which certification was unqualified.

Financial Information About Industry Segments

We operate in two reportable segments: real estate (owning and operating apartments) and investment management business (providing property management and other services relating to the apartment business to third parties and affiliates). For further information on these segments, see Note 16 of the consolidated financial statements in Item 8, and Management’s Discussion and Analysis in Item 7.

Business Overview

Our principal objective is to increase long-term stockholder value, which we believe results from increasing asset values, increasing operating cash flows and long-term, predictable Funds From Operations, or FFO (as defined by the National Association of Real Estate Investment Trusts), less capital spending for replacements. For a

description of the meaning of FFO and its use and limitations as an operating measure, see the discussion titled “Funds From Operations” in Item 7.

We strive to meet our objectives by focusing on property operations, generation of fees, portfolio management, reinvestment in properties, increasing land values through entitlements, managing our cost of capital by using leverage that is largely long-term, non-recourse and property specific, and managing our general and administrative costs through increasing productivity.

Property Operations

We divide property operations into two business components: conventional and affordable. Our conventional operations, which are market-rate apartments with rents paid by the resident, include 469 properties with 135,289 units. Aimco Capital conducts our affordable operations of 336 properties with 38,934 units, which typically are apartments with rents frequently subsidized or paid by a government agency.

Our property operations are characterized by diversification of product, location and price point. We operate a broad range of property types, from suburban garden-style to urban high-rise properties in 46 states, the District of Columbia and Puerto Rico at a broad range of average monthly rental rates, with most between $500 and $1,100 per month, and reaching as high as $6,500 per month at some of our premier properties. This geographic diversification insulates us, to some degree, from inevitable downturns in any one market.

Conventional

Our conventional operations are organized into four divisions, each of which is supervised by a Division Vice President, or DVP, and are furthersub-divided into 17 regional operating centers, or ROCs. As changes in our portfolio occur, we reevaluate this structure. A Regional Vice President, or RVP, supervises each ROC. The ROCs are generally smaller business units with specialized operational, financial and human resource leadership. We seek to improve the operating results from our property operations by, among other methods, combining centralized financial control and uniform operating procedures with localized property management decision-making and market knowledge. To manage our nationwide portfolio more efficiently and to increase the benefits from our local management expertise, we have given direct responsibility for operations to the RVP with oversight from extensive regular reviews with senior management. To enable the RVPs to focus on sales and service, as well as improve financial control and budgeting, we have dedicated a regional financial officer to support each RVP. In addition, our construction services group handles all work on site beyond routine maintenance, thus reducing the need for RVPs to spend time on oversight of construction projects. We continue to improve our corporate-level oversight of conventional property operations by developing better systems, standardizing business goals, operational measurements and internal reporting, and enhancing financial controls over field operations. Our objectives are to focus on the areas discussed below:


	•	Customer Service. Our operating culture is to be focused on our customers. Our goal is to provide our residents with consistent service in clean, safe and attractive communities. We evaluate our performance through a customer satisfaction tracking system. In addition, we emphasize the quality of ouron-site employees through recruiting, training and retention programs, which we believe contributes to improved customer service and leads to increased occupancy rates and enhanced performance.

	•	Resident Selection and Retention. In apartment properties, neighbors are a part of the product, together with the location of the property and the physical quality of the apartment units. Part of our conventional operations strategy is to focus on resident acquisition and retention — attracting and retaining credit-worthy residents who are good neighbors. We have structured goals and coaching for all of our sales personnel, a tracking system for inquiries and a standardized renewal communication program. We have standardized residential financial stability requirements and have policies and monitoring practices to maintain our resident quality. We believe that the costs exceed the benefits when higher occupancy results from lowering of financial stability standards.

	•	Revenue Increases. We increase rents where feasible and seek to improve occupancy rates. We are also focused on the automation ofon-site operations, as we believe that timely and accurate collection of property


		performance and resident profile data will enable us to maximize revenue through better property management and leasing decisions. We have standardized policies for new and renewal pricing with timely data and analyses by floor-plan, thereby enabling us to maximize our ability to modify pricing, even in challengingsub-markets.


	•	Controlling Expenses. Cost controls are accomplished by local focus at the ROC level and by taking advantage of economies of scale at the corporate level. As a result of the size of our portfolio and our regional concentrations of properties, we have the ability to spread over a large property base fixed costs for general and administrative expenditures and certain operating functions, such as purchasing, insurance and information technology. We expanded our local vendor consolidation program and implemented an electronic procurement system to provide better ongoing control over purchasing decisions and to take advantage of volume discounts. We also are implementing initiatives to retain our current residents and reduce the time and costs associated with resident turnover. Additionally, we have focused on energy management and centralized media programs to control expenses.

	•	Ancillary Services. We believe that our ownership and management of properties provide us with unique access to a customer base that allows us to provide additional services and thereby increase occupancy and rents, while also generating incremental revenue. We currently provide cable television, telephone services, appliance rental, and carport, garage and storage space rental at certain properties.

Aimco Capital

We are among the largest owners and operators of affordable properties in the United States. Aimco Capital was organized to focus on our affordable housing properties, the operations of which are most often subsidized or financed by the United States Department of Housing and Urban Development, or HUD, state housing agencies or tax credit financing, and is led by a management team dedicated to this sector. Aimco Capital operates our affordable properties through three ROCs. Affordable properties tend to have stable rents and occupancy due to government subsidies and thus are much less affected by market circumstances.

Aimco Capital also generates activity fees from transactions related to affordable holdings (including tax credit redevelopments, syndications, dispositions and refinancings), and asset management income from the financial management of our owned and operated affordable portfolio as well as two other large portfolios for which we provide asset management services only.

Portfolio Management

Conventional

We view our conventional property portfolio in terms of “core” and “non-core” properties. Core properties are those properties that are located in markets where population and employment growth are expected to exceed national trends and where we believe there is potential for long-term growth at higher rates of return. Our core operations are focused in 27 markets, located primarily in coastal states as well as the Rocky Mountain region and Chicago. We plan to exit certain Texas and Midwest markets where the average four-year growth rate is projected to be below the average of the remainder of the core portfolio. At December 31, 2006, we had 270 conventional core properties, which generally we intend to hold and improve over the long-term. Within our core portfolio, the largest single market (Washington, D.C.) contributed approximately 10%, and the five largest markets (Washington, D.C., Southern California, New England, Philadelphia and Miami-Fort Lauderdale) together contributed approximately 38%, to income before depreciation and interest expense, or net operating income. At December 31, 2006, we had 199 conventional non-core properties, which we generally intend to hold for investment for the intermediate term. Non-core properties are those properties located within the 26 markets we intend to exit or in less favored locations within the 27 markets that comprise our core portfolio. We exited six markets in 2006. During 2007, we expect to exit an additional eight markets and over the next several years we expect to exit the remaining markets in which we hold our non-core properties.

Portfolio management includes expanding our core portfolio through acquisitions of properties located in markets where our core portfolio is concentrated. We specifically seek investments in a variety of asset qualities and

types at a purchase price below replacement cost. Currently, we acquire properties and property interests primarily in three ways:


	•	the direct acquisition of a property or portfolio of properties;

	•	acquisition of a portfolio of properties through a purchase from, or a merger or business combination with, an entity that owns or controls the property or portfolio being acquired; and

	•	the purchase from third parties, subject to our fiduciary duties, of additional interests in partnerships where we own a general partnership interest.

In 2006, we completed direct acquisitions of nine conventional core properties, containing approximately 1,700 residential units for an aggregate purchase price of approximately $177 million (including transaction costs). These properties are located in California, Florida and North Carolina. In addition, we originated approximately $100 million in loans secured by 87 properties with 1,597 residential units and 42 commercial spaces in the West Harlem District of New York City. In conjunction with this loan agreement, we obtained an option to purchase some or all of the properties during the next ten years. We also acquired additional interests in 48 partnerships for approximately $18 million (including transaction costs).

Portfolio management also includes dispositions of properties located within markets we intend to exit, properties in less favored locations within the 27 markets that comprise our core portfolio or properties that do not meet our long-term investment criteria. Additionally, from time to time, we may dispose of certain core properties that are consistent with our long-term investment strategy but offer attractive returns, such as in sales to buyers who intend to convert the properties to condominiums. The sales of core and non-core properties partially fund our acquisitions and capital improvements on our existing properties. In 2006, we sold 63 non-core properties and two core properties generating net cash proceeds to us, after repayment of existing debt, payment of transaction costs and distributions to limited partners, of $505 million.

Aimco Capital

The portfolio management strategy for Aimco Capital is similar to that of our Conventional portfolio. Aimco Capital seeks to dispose of properties that are inconsistent with our long-term investment strategy and Aimco Capital’s operations. During 2006, we sold 23 non-core properties from within the Aimco Capital portfolio, generating net cash proceeds to us, after repayment of existing debt, payment of transaction costs and distributions to limited partners, of $19.5 million. At December 31, 2006 within the Aimco Capital portfolio, we had 237 consolidated properties, a majority of which are non-core properties that we generally intend to hold for investment for the intermediate term. During 2007, we intend to sell approximately the same number of Aimco Capital properties as we sold in 2006.

Entitlements

We have the opportunity to improve land values by seeking new entitlements for many properties. Entitlements provide us the opportunity to enhance the value of our existing portfolio by obtaining local governmental approvals to increase density and add dwelling or residential units to a site. Also, we seek to add incremental value through redevelopment of existing units and excess land sales. We achieved new entitlements on five projects, with approximately 2,000 units, in 2006. We currently have approximately 20 entitlement projects underway or under review. These properties are typically well located and in many cases were built 30 or more years ago.

Reinvestment in Properties

We believe that the physical condition and amenities of our apartment properties are important factors in our ability to maintain and increase rental rates. In 2006, we spent $76.6 million, or $535 per owned apartment unit, for Capital Replacements, which represent the share of expenditures that are deemed to replace the consumed portion of acquired capital assets. Additionally, we spent $99.2 million for Capital Improvements, which are non-redevelopment capital expenditures that are made to enhance the value, profitability or useful life of an asset from its original purchase condition.

In addition to maintenance and improvements of our properties, we focus on the redevelopment of certain properties each year. We believe redevelopment of certain properties in superior locations provides advantages overground-up development, enabling us to generate rents comparable to new properties with relatively lower financial risk, in less time and with reduced delays associated with governmental permits and authorizations. We undertake two types of redevelopment projects: major projects, where a substantial number of all available units are vacated for significant renovations to the property; and moderate projects, where there is significant renovation, such as exteriors, common areas or unit improvements, typically done upon lease expirations without the need to vacate units on any wholesale or substantial basis. We have a specialized Redevelopment and Construction Services Group, which includes engineers, architects and construction managers, to oversee these projects. As of December 31, 2006, we had 54 projects at various stages of redevelopment. Of the 54 projects, 45 are conventional properties one major project and 44 moderate projects) and nine are affordable properties. During 2006, redevelopment expenditures totaled $258.6 million, of which our share totaled $230.8 million, and we completed three projects as well as interior upgrades or new construction on approximately 2,300 conventional units. Total redevelopment expenditures for our 45 active conventional projects will be approximately $493 million, of which approximately $296 million remains to be spent. Total redevelopment expenditures for our nine affordable redevelopments will be approximately $68 million, of which approximately $30 million remains to be spent, most of which will be funded by third-party tax credit equity and tax-exempt debt. In 2007, we plan to invest between $275 and $325 million in conventional redevelopment projects that will affect approximately 79 properties with over 30,000 units. Additionally, in 2007 redevelopment expenditures on affordable properties will be approximately $36 million, predominantly funded by third-party tax credit equity, affecting more than 15 properties with more than 1,800 units.

Cost of Capital

We are focused on minimizing our cost of capital. We have a deliberate policy of using non-recourse property debt. The lower risk inherent in non-recourse property debt permits us to operate with higher debt leverage and a lower weighted average cost of capital. During 2006, we closed loans totaling $1,224.6 million at an average interest rate of 5.66%, which included the refinancing of loans totaling $586.3 million with prior interest rates averaging 6.34%.

Productivity

Over the past several years, we had growth in our general and administrative spending as a result of the building of our infrastructure in certain areas in which we had needs, including, operational systems, information technology and other automation, human resources, and expanded accounting, legal, and financial planning and analysis functions. During 2006, we reduced general and administrative expenses before variable compensation by approximately $8 million as compared to 2005. We are focused on continued containment of this spending going forward through enhanced productivity and process improvements.

Competition

In attracting and retaining residents to occupy our properties we compete with numerous other housing alternatives. Our properties compete directly with other rental apartments, as well as with condominiums and single-family homes that are available for rent or purchase in the markets in which our properties are located. Principal factors of competition include rent or price charged, attractiveness of the location and property and quality and breadth of services. The number of competitive properties in a particular area has a material effect on our ability to lease apartment units at our properties and on the rents we charge. Additionally, we compete with other real estate investors, including other apartment REITs, pension and investment funds, partnerships and investment companies in acquiring, redeveloping and managing apartment properties. This competition affects our ability to acquire properties we want to add to our portfolio and the price that we pay in such acquisitions.

Taxation

a manner. Our current and continuing qualification as a REIT depends on our ability to meet the various requirements imposed by the Code, which are related to organizational structure, distribution levels, diversity of stock ownership and certain restrictions with regard to owned assets and categories of income. If we qualify for taxation as a REIT, we will generally not be subject to United States Federal corporate income tax on our taxable income that is currently distributed to stockholders. This treatment substantially eliminates the “double taxation” (at the corporate and stockholder levels) that generally results from investment in a corporation.

Even if we qualify as a REIT, we may be subject to United States Federal income and excise taxes in various situations, such as on our undistributed income. We also will be required to pay a 100% tax on any net income on non-arm’s length transactions between us and a TRS (described below) and on any net income from sales of property that was property held for sale to customers in the ordinary course. We and our stockholders may be subject to state or local taxation in various state or local jurisdictions, including those in which we transact business or our stockholders reside. In addition, we could also be subject to the alternative minimum tax, or AMT, on our items of tax preference. Any taxes imposed on us could reduce our operating cash flow and net income. The state and local tax laws may not conform to the United States Federal income tax treatment.

Certain of our operations (property management, asset management, risk, etc.) are conducted through taxable REIT subsidiaries, each of which we refer to as a TRS. A TRS is a C-corporation that has not elected REIT status and as such is subject to United States Federal corporate income tax. We use TRS entities to facilitate our ability to offer certain services and activities to our residents, as these services and activities generally cannot be offered directly by the REIT.

Regulation

General

Apartment properties are subject to various laws, ordinances and regulations, including regulations relating to recreational facilities such as swimming pools, activity centers and other common areas. Changes in laws increasing the potential liability for environmental conditions existing on properties or increasing the restrictions on discharges or other conditions, as well as changes in laws affecting development, construction and safety requirements, may result in significant unanticipated expenditures, which would adversely affect our net income and cash flows from operating activities. In addition, future enactment of rent control or rent stabilization laws or other laws regulating multifamily housing may reduce rental revenue or increase operating costs in particular markets.

Environmental

Insurance

Our primary lines of insurance coverage are property, general liability, and workers’ compensation. We believe that our insurance coverages adequately insure our properties against the risk of loss attributable to fire, earthquake, hurricane, tornado, flood and other perils and adequately insure us against other risk. Our coverage includes deductibles, retentions and limits that are customary in the industry. We have established loss prevention, loss mitigation, claims handling, litigation management and loss reserving procedures to manage our exposure.

Employees

We currently have approximately 6,000 employees, of which approximately 4,700 are at the property level, performing variouson-site functions, with the balance managing corporate and regional operations, including investment and debt transactions, legal, financial reporting, accounting, information systems, human resources and

other support functions. Unions represent approximately 100 of our employees. We have never experienced a work stoppage and believe we maintain satisfactory relations with our employees.


Item 1A.	*Risk Factors*

The risk factors noted in this section and other factors noted throughout this Annual Report, describe certain risks and uncertainties that could cause our actual results to differ materially from those contained in any forward-looking statement.

Failure to generate sufficient net operating income may limit our ability to pay dividends.

Our ability to make payments to our investors depends on our ability to generate net operating income in excess of required debt payments and capital expenditure requirements. Net operating income may be adversely affected by events or conditions beyond our control, including:


	•	the general economic climate;

	•	competition from other apartment communities and other housing options;

	•	local conditions, such as loss of jobs or an increase in the supply of apartments, that might adversely affect apartment occupancy or rental rates;

	•	changes in governmental regulations and the related cost of compliance;

	•	increases in operating costs (including real estate taxes) due to inflation and other factors, which may not be offset by increased rents;

	•	changes in tax laws and housing laws, including the enactment of rent control laws or other laws regulating multifamily housing; and

	•	changes in interest rates and the availability of financing.

Redevelopment and construction risks could affect our profitability.

We intend to continue to redevelop certain of our properties. These activities are subject to the following risks:


	•	we may be unable to obtain, or experience delays in obtaining, necessary zoning, occupancy, or other required governmental or third party permits and authorizations, which could result in increased costs or the delay or abandonment of opportunities;

	•	we may incur costs that exceed our original estimates due to increased material, labor or other costs;

	•	we may be unable to complete construction and lease up of a property on schedule, resulting in increased construction and financing costs and a decrease in expected rental revenues;

	•	occupancy rates and rents at a property may fail to meet our expectations for a number of reasons, including changes in market and economic conditions beyond our control and the development by competitors of competing communities;

	•	we may be unable to obtain financing with favorable terms, or at all, for the proposed development of a property, which may cause us to delay or abandon an opportunity;

	•	we may abandon opportunities that we have already begun to explore for a number of reasons, including changes in local market conditions or increases in construction or financing costs, and, as a result, we may fail to recover expenses already incurred in exploring those opportunities;

	•	we may incur liabilities to third parties during the redevelopment process, for example, in connection with tenant terminations, or managing existing improvements on the site prior to tenant terminations; and

	•	loss of a key member of project team could adversely affect our ability to deliver redevelopment projects on time and within our budget.

If we are not successful in our acquisition of properties, our results of operations could be adversely affected.

The selective acquisition of properties is a component of our strategy. However, we may not be able to complete transactions successfully in the future. Although we seek to acquire, properties only when such activities increase our net income, Funds From Operations or net asset value, such transactions may fail to perform in accordance with our expectations.

Our existing and future debt financing could render us unable to operate, result in foreclosure on our properties or prevent us from making distributions on our equity.

Our strategy is generally to incur debt to increase the return on our equity while maintaining acceptable interest coverage ratios. For the year ended December 31, 2006, we had a ratio of free cash flow (net operating income less spending for capital replacements) to combined interest expense and preferred stock dividends of 1.6:1. Our organizational documents do not limit the amount of debt that we may incur, and we have significant amounts of debt outstanding. Payments of principal and interest may leave us with insufficient cash resources to operate our properties or pay distributions required to be paid in order to maintain our qualification as a REIT. We are also subject to the risk that our cash flow from operations will be insufficient to make required payments of principal and interest, and the risk that existing indebtedness may not be refinanced or that the terms of any refinancing will not be as favorable as the terms of existing indebtedness. If we fail to make required payments of principal and interest on secured debt, our lenders could foreclose on the properties securing such debt, which would result in loss of income and asset value to us. As of December 31, 2006, substantially all of the properties that we owned or controlled were encumbered by debt.

Increases in interest rates would increase our interest expense.

As of December 31, 2006, we had approximately $1,663.4 million of variable-rate indebtedness outstanding. Of the total debt subject to variable interest rates, floating rate tax-exempt bond financing was $640.6 million. Floating rate tax-exempt bond financing is benchmarked against the BMA Index, which since 1981 has averaged 68% of the30-day LIBOR rate. If this relationship continues, an increase in30-day LIBOR of 1.0% (0.68% in tax-exempt interest rates) would result in our income before minority interests and cash flows being reduced by $14.6 million on an annual basis. This would be offset by variable rate interest income earned on certain assets, including cash and cash equivalents and notes receivable, as well as interest that is capitalized on a portion of this variable rate debt incurred in connection with our redevelopment activities. Considering these offsets, the same increase in30-day LIBOR would result in our income before minority interests being reduced by $4.4 million on an annual basis.

Covenant restrictions may limit our ability to make payments to our investors.

Some of our debt and other securities contain covenants that restrict our ability to make distributions or other payments to our investors unless certain financial tests or other criteria are satisfied. Our credit facility provides, among other things, that we may make distributions to our investors during any four consecutive fiscal quarters in an aggregate amount that does not exceed the greater of 95% of our Funds From Operations for such period or such amount as may be necessary to maintain our REIT status. Our outstanding classes of preferred stock prohibit the payment of dividends on our Common Stock if we fail to pay the dividends to which the holders of the preferred stock are entitled.

Competition could limit our ability to lease apartments or increase or maintain rents.

Our apartment properties compete for residents with other housing alternatives, including other rental apartments, condominiums and single-family homes that are available for rent, as well as new and existing condominiums and single-family homes for sale. Competitive residential housing in a particular area could adversely affect our ability to lease apartments and to increase or maintain rental rates.

We depend on distributions and other payments from our subsidiaries that they may be prohibited from making to us.

All of our properties are owned, and all of our operations are conducted, by the Aimco Operating Partnership and our other subsidiaries. As a result, we depend on distributions and other payments from our subsidiaries in order to satisfy our financial obligations and make payments to our investors. The ability of our subsidiaries to make such distributions and other payments depends on their earnings and may be subject to statutory or contractual limitations. As an equity investor in our subsidiaries, our right to receive assets upon their liquidation or reorganization will be effectively subordinated to the claims of their creditors. To the extent that we are recognized as a creditor of such subsidiaries, our claims may still be subordinate to any security interest in or other lien on their assets and to any of their debt or other obligations that are senior to our claims.

Because real estate investments are relatively illiquid, we may not be able to sell properties when appropriate.

Real estate investments are relatively illiquid and cannot always be sold quickly. Thus, we may not be able to change our portfolio promptly in response to changes in economic or other market conditions. Our ability to dispose of assets in the future will depend on prevailing economic and market conditions. This could have a material adverse effect on our financial condition or results of operations.

We may be subject to litigation associated with partnership acquisitions that could increase our expenses and prevent completion of beneficial transactions.

We have engaged in, and intend to continue to engage in, the selective acquisition of interests in partnerships that own apartment properties. In some cases, we have acquired the general partner of a partnership and then made an offer to acquire the limited partners’ interests in the partnership. In these transactions, we may be subject to litigation based on claims that we, as the general partner, have breached our fiduciary duty to our limited partners or that the transaction violates the relevant partnership agreement or state law. Although we intend to comply with our fiduciary obligations and the relevant partnership agreements, we may incur additional costs in connection with the defense or settlement of this type of litigation. In some cases, this type of litigation may adversely affect our desire to proceed with, or our ability to complete, a particular transaction. Any litigation of this type could also have a material adverse effect on our financial condition or results of operations.

We are self-insured for certain risks and the cost of insurance, increased claims activity or losses resulting from catastrophic events may affect our operating results and financial condition.

We are self-insured for a portion of our consolidated properties’ exposure to casualty losses resulting from fire, earthquake, hurricane, tornado, flood and other perils. We recognize casualty losses or gains based on the net book value of the affected property and any related insurance proceeds. In many instances, the actual cost to repair or replace the property may exceed its net book value and any insurance proceeds. We also insure certain unconsolidated properties for a portion of their exposure to such losses. In addition, we are self-insured for a portion of our exposure to third-party claims related to our employee health insurance plans, workers’ compensation coverage, and general liability exposure. With respect to our insurance obligations to unconsolidated properties and our exposure to claims of third parties, we establish reserves at levels that reflect our known and estimated losses. The ultimate cost of losses and the impact of unforeseen events may vary materially from recorded reserves, and variances may adversely affect our operating results and financial condition. We purchase insurance (or reinsurance where we insure unconsolidated properties) to reduce our exposure to catastrophe losses and limit our financial losses on large individual risks. The availability and cost of insurance are determined by market conditions outside our control. No assurance can be made that we will be able to obtain and maintain insurance at the same levels and on the same terms as we do today. If we are not able to obtain or maintain insurance in amounts we consider appropriate for our business, or if the cost of obtaining such insurance increases materially, we may have to retain a larger portion of the potential loss associated with our exposures to risks. The extent of our losses in connection with catastrophic events is a function of the severity of the event and the total amount of exposure in the affected area. When we have geographic concentration of exposures, a single catastrophe (such as an earthquake) or destructive weather trend affecting a region may have a significant impact on our financial

condition and results of operations. We cannot accurately predict catastrophes, or the number and type of catastrophic events that will affect us. As a result, our operating and financial results may vary significantly from one period to the next. While we anticipate and plan for catastrophe losses, there can be no assurance that our financial results will not be adversely affected by our exposure to losses arising from catastrophic events in the future that exceed our previous experience and assumptions.

We depend on our senior management.

Our success depends upon the retention of our senior management, including Terry Considine, our chief executive officer and president. There are no assurances that we would be able to find qualified replacements for the individuals who make up our senior management if their services were no longer available. The loss of services of one or more members of our senior management team could have a material adverse effect on our business, financial condition and results of operations. We do not currently maintain key-man life insurance for any of our employees. The loss of any member of senior management could adversely affect our ability to pursue effectively our business strategy.

Affordable housing regulations may limit the opportunities at some of our properties and failure to comply with resident qualification requirements may result in financial penaltiesand/or loss of benefits.

We own consolidated and unconsolidated equity interests in certain properties and manage for third parties and affiliates other properties that benefit from governmental programs intended to provide housing to people with low or moderate incomes. These programs, which are usually administered by HUD or state housing finance agencies, typically provide mortgage insurance, favorable financing terms, tax-credit equity, or rental assistance payments to the property owners. As a condition of the receipt of assistance under these programs, the properties must comply with various requirements, which typically limit rents to pre-approved amounts and impose restrictions on resident incomes. Failure to comply with these requirements and restrictions may result in financial penalties or loss of benefits. We usually need to obtain the approval of HUD in order to manage, or acquire a significant interest in, a HUD-assisted property. We may not always receive such approval.

Laws benefiting disabled persons may result in our incurrence of unanticipated expenses.

Under the Americans with Disabilities Act of 1990, or ADA, all places intended to be used by the public are required to meet certain Federal requirements related to access and use by disabled persons. Likewise, the Fair Housing Amendments Act of 1988, or FHAA, requires apartment properties first occupied after March 13, 1990 to be accessible to the handicapped. These and other Federal, state and local laws may require modifications to our properties, or restrict renovations of the properties. Noncompliance with these laws could result in the imposition of fines or an award of damages to private litigants and also could result in an order to correct any non-complying feature, which could result in substantial capital expenditures. Although we believe that our properties are substantially in compliance with present requirements, we may incur unanticipated expenses to comply with the ADA and the FHAA.

Potential liability or other expenditures associated with potential environmental contamination may be costly.

Various Federal, state and local laws subject property owners or operators to liability for management, and the costs of removal or remediation, of certain hazardous substances present on a property. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release or presence of the hazardous substances. The presence of, or the failure to manage or remedy properly, hazardous substances may adversely affect occupancy at affected apartment communities and the ability to sell or finance affected properties. In addition to the costs associated with investigation and remediation actions brought by government agencies, and potential fines or penalties imposed by such agencies in connection therewith, the presence of hazardous substances on a property could result in claims by private plaintiffs for personal injury, disease, disability or other infirmities. Various laws also impose liability for the cost of removal, remediation or disposal of hazardous substances through a licensed disposal or treatment facility. Anyone who arranges for the disposal or treatment of hazardous substances is potentially liable under such laws. These laws often impose liability whether or not the person arranging for the

disposal ever owned or operated the disposal facility. In connection with the ownership, operation and management of properties, we could potentially be liable for environmental liabilities or costs associated with our properties or properties we acquire or manage in the future.

Moisture infiltration and resulting mold remediation may be costly.

We have been named as a defendant in lawsuits that have alleged personal injury and property damage as a result of the presence of mold. In addition, we are aware of lawsuits against owners and managers of multifamily properties asserting claims of personal injury and property damage caused by the presence of mold, some of which have resulted in substantial monetary judgments or settlements. We have only limited insurance coverage for property damage loss claims arising from the presence of mold and for personal injury claims related to mold exposure. We have implemented policies, procedures, third-party audits and training, and include a detailed moisture intrusion and mold assessment during acquisition due diligence. We believe these measures will prevent or eliminate mold exposure from our properties and will minimize the effects that mold may have on our residents. To date, we have not incurred any material costs or liabilities relating to claims of mold exposure or to abate mold conditions. Because the law regarding mold is unsettled and subject to change we can make no assurance that liabilities resulting from the presence of or exposure to mold will not have a material adverse effect on our consolidated financial condition or results of operations.

The FBI has issued alerts regarding potential terrorist threats involving apartment buildings.

From time to time, the Federal Bureau of Investigation, or FBI, and the United States Department of Homeland Security issue alerts regarding potential terrorist threats involving apartment buildings. Threats of future terrorist attacks, such as those announced by the FBI and the Department of Homeland Security, could have a negative effect on rent and occupancy levels at our properties. The effect that future terrorist activities or threats of such activities could have on our business is uncertain and unpredictable. If we incur a loss at a property as a result of an act of terrorism, we could lose all or a portion of the capital we have invested in the property, as well as the future revenue from the property.

We may fail to qualify as a REIT.

If we fail to qualify as a REIT, we will not be allowed a deduction for dividends paid to our stockholders in computing our taxable income, and we will be subject to Federal income tax at regular corporate rates, including any applicable alternative minimum tax. This would substantially reduce our funds available for payment to our investors. Unless entitled to relief under certain provisions of the Code, we also would be disqualified from taxation as a REIT for the four taxable years following the year during which we ceased to qualify as a REIT. In addition, our failure to qualify as a REIT would trigger the following consequences:


	•	we would be obligated to repurchase certain classes of our preferred stock; and

	•	we would be in default under our primary credit facilities and certain other loan agreements.

We believe that we operate, and have always operated, in a manner that enables us to meet the requirements for qualification as a REIT for Federal income tax purposes. Our continued qualification as a REIT will depend on our satisfaction of certain asset, income, investment, organizational, distribution, stockholder ownership and other requirements on a continuing basis. Our ability to satisfy the asset tests depends upon our analysis of the fair market values of our assets, some of which are not susceptible to a precise determination, and for which we will not obtain independent appraisals. Our compliance with the REIT income and quarterly asset requirements also depends upon our ability to manage successfully the composition of our income and assets on an ongoing basis. Moreover, the proper classification of an instrument as debt or equity for Federal income tax purposes may be uncertain in some circumstances, which could affect the application of the REIT qualification requirements. Accordingly, there can be no assurance that the Internal Revenue Service, or the IRS, will not contend that our interests in subsidiaries or other issuers constitutes a violation of the REIT requirements. Moreover, future economic, market, legal, tax or other considerations may cause us to fail to qualify as a REIT, or our Board of Directors may determine to revoke our REIT status.

REIT distribution requirements limit our available cash.

As a REIT, we are subject to annual distribution requirements, which limit the amount of cash we retain for other business purposes, including amounts to fund our growth. We generally must distribute annually at least 90% of our net REIT taxable income, excluding any net capital gain, in order for our distributed earnings not to be subject to corporate income tax. We intend to make distributions to our stockholders to comply with the requirements of the Code. However, differences in timing between the recognition of taxable income and the actual receipt of cash could require us to sell assets or borrow funds on a short-term or long-term basis to meet the 90% distribution requirement of the Code.

Limits on ownership of shares in our charter may result in the loss of economic and voting rights by purchasers that violate those limits.

Our charter limits ownership of our Common Stock by any single stockholder (applying certain “beneficial ownership” rules under the Federal securities laws) to 8.7% of our outstanding shares of Common Stock, or 15% in the case of certain pension trusts, registered investment companies and Mr. Considine. Our charter also limits ownership of our Common Stock and preferred stock by any single stockholder to 8.7% of the value of the outstanding Common Stock and preferred stock, or 15% in the case of certain pension trusts, registered investment companies and Mr. Considine. The charter also prohibits anyone from buying shares of our capital stock if the purchase would result in us losing our REIT status. This could happen if a transaction results in fewer than 100 persons owning all of our shares of capital stock or results in five or fewer persons (applying certain attribution rules of the Code) owning 50% or more of the value of all of our shares of capital stock. If anyone acquires shares in excess of the ownership limit or in violation of the ownership requirements of the Code for REITs:


	•	the transfer will be considered null and void;

	•	we will not reflect the transaction on our books;

	•	we may institute legal action to enjoin the transaction;

	•	we may demand repayment of any dividends received by the affected person on those shares;

	•	we may redeem the shares;

	•	the affected person will not have any voting rights for those shares; and

	•	the shares (and all voting and dividend rights of the shares) will be held in trust for the benefit of one or more charitable organizations designated by us.

We may purchase the shares of capital stock held in trust at a price equal to the lesser of the price paid by the transferee of the shares or the then current market price. If the trust transfers any of the shares of capital stock, the affected person will receive the lesser of the price paid for the shares or the then current market price. An individual who acquires shares of capital stock that violate the above rules bears the risk that the individual:


	•	may lose control over the power to dispose of such shares;

	•	may not recognize profit from the sale of such shares if the market price of the shares increases;

	•	may be required to recognize a loss from the sale of such shares if the market price decreases; and

	•	may be required to repay to us any distributions received from us as a result of his or her ownership of the shares.

Our charter may limit the ability of a third party to acquire control of us.

The 8.7% ownership limit discussed above may have the effect of precluding acquisition of control of us by a third party without the consent of our Board of Directors. Our charter authorizes our Board of Directors to issue up to 510,587,500 shares of capital stock. As of December 31, 2006, 426,157,736 shares were classified as Common Stock, of which 96,820,252 were outstanding, and 84,429,764 shares were classified as preferred stock, of which 26,854,962 were outstanding. Under our charter, our Board of Directors has the authority to classify and reclassify

any of our unissued shares of capital stock into shares of capital stock with such preferences, rights, powers and restrictions as our Board of Directors may determine. The authorization and issuance of a new class of capital stock could have the effect of delaying or preventing someone from taking control of us, even if a change in control were in our stockholders’ best interests.

Maryland business statutes may limit the ability of a third party to acquire control of us.

As a Maryland corporation, we are subject to various Maryland laws that may have the effect of discouraging offers to acquire us and increasing the difficulty of consummating any such offers, even if an acquisition would be in our stockholders’ best interests. The Maryland General Corporation Law restricts mergers and other business combination transactions between us and any person who acquires beneficial ownership of shares of our stock representing 10% or more of the voting power without our Board of Directors’ prior approval. Any such business combination transaction could not be completed until five years after the person acquired such voting power, and generally only with the approval of stockholders representing 80% of all votes entitled to be cast and 662/3% of the votes entitled to be cast, excluding the interested stockholder, or upon payment of a fair price. Maryland law also provides generally that a person who acquires shares of our capital stock that represent 10% or more of the voting power in electing directors will have no voting rights unless approved by a vote of two-thirds of the shares eligible to vote. Additionally, Maryland law provides, among other things, that the board of directors has broad discretion in adopting stockholders’ rights plans and has the sole power to fix the record date, time and place for special meetings of the stockholders. In addition, Maryland law provides that corporations that:


	•	have at least three directors who are not employees of the entity or related to an acquiring person; and

	•	are subject to the reporting requirements of the Securities Exchange Act of 1934,

may elect in their charter or bylaws or by resolution of the board of directors to be subject to all or part of a special subtitle that provides that:


	•	the corporation will have a staggered board of directors;

	•	any director may be removed only for cause and by the vote of two-thirds of the votes entitled to be cast in the election of directors generally, even if a lesser proportion is provided in the charter or bylaws;

	•	the number of directors may only be set by the board of directors, even if the procedure is contrary to the charter or bylaws;

	•	vacancies may only be filled by the remaining directors, even if the procedure is contrary to the charter or bylaws; and

	•	the secretary of the corporation may call a special meeting of stockholders at the request of stockholders only on the written request of the stockholders entitled to cast at least a majority of all the votes entitled to be cast at the meeting, even if the procedure is contrary to the charter or bylaws.

To date, we have not made any of the elections described above.

Item 1B. Unresolved Staff Comments

None.


Item 2.	*Properties*

Our properties are located in 46 states, the District of Columbia and Puerto Rico. As of December 31, 2006, our conventional properties are operated through 17 regional operating centers. Affordable property operations are managed through Aimco Capital and are operated through three regional operating centers. The following table sets forth information on all of our property operations as of December 31, 2006 and 2005:


	2006				2005
	Number of		Number		Number of		Number
Regional Operating Center(1)	Properties		of Units		Properties		of Units

Conventional:
Atlanta, GA		32		8,286		41		10,712
Austin, TX		—		—		25		5,566
Boston, MA		16		5,745		16		5,745
Chicago, IL		30		8,339		32		8,784
Columbus, OH		34		9,664		39		10,139
Dallas, TX		36		8,026		31		7,945
Denver, CO		33		7,487		33		7,487
Houston, TX		37		9,776		37		9,776
Indianapolis, IN		33		12,318		32		11,947
Los Angeles, CA		39		10,867		36		10,622
New York, NY		12		589		—		—
Orlando, FL		29		8,041		31		8,600
Philadelphia, PA		16		7,493		15		7,180
Phoenix, AZ		28		7,544		36		10,002
Rockville, MD		29		12,157		29		12,156
South Florida		15		5,300		15		5,862
Tampa, FL		21		5,787		21		5,926
Tidewater, VA		28		7,618		28		7,716
University Communities(2)		—		—		15		4,443

Total conventional owned and managed		468		135,037		512		150,608

Affordable (Aimco Capital):
Central		121		12,726		131		13,721
Northeast		87		12,551		104		14,769
West		63		6,908		71		7,607

Total affordable owned and managed		271		32,185		306		36,097

Owned but not managed		66		7,001		65		7,112
Property management for third parties		41		3,573		52		5,246
Asset management for third parties		410		38,617		435		41,421

Total		1,256		216,413		1,370		240,484


(1)		As our portfolio changes due to property acquisitions and dispositions, we periodically evaluate the organization of our regional operating centers, or ROCs. During 2006, we combined the Austin and Dallas ROCs and added a ROC in New York.

(2)		The properties within University Communities at December 31, 2005 have been either sold or moved into various existing ROCs depending on the location of the property.

At December 31, 2006, we owned an equity interest in and consolidated 703 properties containing 162,432 apartment units, which we refer to as “consolidated.” These consolidated properties contain, on average, 231 apartment units, with the largest property containing 2,877 apartment units. These properties offer residents a range of amenities, including swimming pools, clubhouses, spas, fitness centers, tennis courts and saunas. Many of the apartment units offer features such as vaulted ceilings, fireplaces, washer and dryerhook-ups, cable television, balconies and patios. Additional information on our consolidated properties is contained in “Schedule III, Real Estate and Accumulated Depreciation” in this Annual Report. At December 31, 2006, we held an equity interest in and did not consolidate 102 properties containing 11,791 apartment units, which we refer to as “unconsolidated.” In addition, we provided property management services for third parties owning 41 properties containing 3,573 apartment units, and asset management services for third parties owning 410 properties containing 38,617 apartment units, although in certain cases we may indirectly own generally less than one percent of the operations of such properties through a partnership syndication or other fund.

Substantially all of our consolidated properties are encumbered by mortgage indebtedness. At December 31, 2006, our consolidated properties were encumbered by aggregate mortgage indebtedness totaling $6,265.1 million having an aggregate weighted average interest rate of 6.12%. Such mortgage indebtedness was secured by 680 properties with a combined net book value of $8,936.3 million. Included in the 680 properties, we had a total of 60 mortgage loans, with an aggregate principal balance outstanding of $693.5 million, that were each secured by property and cross-collateralized with certain (but not all) other mortgage loans within this group of 60 mortgage loans. See Note 6 of the consolidated financial statements in Item 8 for additional information about our indebtedness.


Item 3.	*Legal Proceedings*

See the information under the caption “Legal Matters” in Note 8 of the consolidated financial statements in Item 8 for information regarding legal proceedings, which information is incorporated by reference in this Item 3.


Item 4.	*Submission of Matters to a Vote of Security Holders*

No matters were submitted to a vote of security holders during the fourth quarter of 2006.

PART II


Item 5.	*Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities*

Our Common Stock has been listed and traded on the NYSE under the symbol “AIV” since July 22, 1994. The following table sets forth the quarterly high and low sales prices of our Common Stock, as reported on the NYSE, and the dividends declared in the periods indicated:


					Dividends
					Declared
Quarter Ended	High		Low		(per share)

2006
December 31, 2006(1)	$	59.17	$	52.63	$	1.20
September 30, 2006		54.96		43.67		0.60
June 30, 2006		47.23		41.41		0.60
March 31, 2006		48.38		37.76		0.00
2005
December 31, 2005(2)		39.80		34.93		1.20
September 30, 2005		44.14		37.57		0.60
June 30, 2005		41.30		36.24		0.60
March 31, 2005		39.39		34.17		0.60


(1)		On December 19, 2006, our Board of Directors declared a quarterly cash dividend of $0.60 per common share for the quarter ended December 31, 2006, that was paid on January 31, 2007, to stockholders of record on December 31, 2006. Our Board of Directors declared the dividend a month early in order to offset gains from 2006 property sales otherwise subject to REIT excise tax. Our Board of Directors anticipates that dividend declarations for the remainder of 2007 will occur on a schedule consistent with 2006.

(2)		On December 28, 2005, our Board of Directors declared a quarterly cash dividend of $0.60 per common share for the quarter ended December 31, 2005, that was paid on January 31, 2006, to stockholders of record on December 31, 2005. Our Board of Directors declared the dividend a month early in order to offset gains from 2005 property sales otherwise subject to REIT excise tax.

On February 23, 2007, the closing price of our Common Stock was $60.53 per share, as reported on the NYSE, and there were 97,577,459 shares of Common Stock outstanding, held by 3,459 stockholders of record. The number of holders does not include individuals or entities who beneficially own shares but whose shares are held of record by a broker or clearing agency, but does include each such broker or clearing agency as one recordholder.

As a REIT, we are required to distribute annually to holders of common stock at least 90% of our “real estate investment trust taxable income,” which, as defined by the Code and United States Department of Treasury regulations, is generally equivalent to net taxable ordinary income. We measure our economic profitability and intend to pay regular dividends to our stockholders based on Funds From Operations, less Capital Replacements during the relevant period. Future payment of dividends are at the discretion of our Board of Directors and will depend on numerous factors including our financial condition, capital requirements, the annual distribution requirements under the provisions of the Code applicable to REITs and such other factors as our Board of Directors deems relevant.

From time to time, we issue shares of Common Stock in exchange for common and preferred OP Units tendered to the Aimco Operating Partnership for redemption in accordance with the terms and provisions of the agreement of limited partnership of the Aimco Operating Partnership. Such shares are issued based on an exchange ratio of one share for each common OP Unit or the applicable conversion ratio for preferred OP Units. The shares are generally issued in exchange for OP Units in private transactions exempt from registration under the Securities Act of 1933, as amended, pursuant to Section 4(2) thereof. During the three and twelve months ended December 31, 2006, approximately 36,000 and 99,000 shares of Common Stock were issued in exchange for common OP Units.

During the three and twelve months ended December 31, 2006, zero shares of Common Stock were issued in exchange for preferred OP Units.

The following table summarizes repurchases of our equity securities in the quarter ended December 31, 2006 (1):


					Total Number of		Maximum
					Shares Purchased as		Number of Shares
			Average		Part of Publicly		that May Yet Be
	Total Number of		Price Paid		Announced Plans or		Purchased Under
Fiscal period(2)	Shares Purchased		per Share		Programs		Plans or Programs

October 1 — October 31, 2006		0		N/A		0		6,065,180
November 1 — November 30, 2006		0		N/A		0		6,065,180
December 1 — December 31, 2006		366,100	$	55.33		366,100		5,699,080

Total		366,100	$	55.33		366,100


(1)		Our Board of Directors has, from time to time, authorized us to repurchase shares of our outstanding capital stock. In April 2005, our Board of Directors authorized us to repurchase up to a total of eight million shares of our Common Stock. We have approximately 5.70 million shares remaining on that authorization. This authorization has no expiration date. These repurchases may be made from time to time in the open market or in privately negotiated transactions.

(2)		During the year ended December 31, 2006, we repurchased approximately 2.3 million shares of Common Stock for cash totaling approximately $120.3 million, or $52.25 per share.

Dividend Payments. Our Credit Agreement includes customary covenants, including a restriction on dividends and other restricted payments, but permits dividends during any four consecutive fiscal quarters in an aggregate amount of up to 95% of our Funds From Operations for such period or such amount as may be necessary to maintain our REIT status.

Performance Graph

The following graph compares cumulative total returns for our Common Stock, the Standard & Poor’s 500 Total Return Index (the “S&P 500”), the NASDAQ Composite, the SNL Residential REIT Index and the MSCI US REIT Index. The SNL Residential REIT Index was prepared by SNL Securities, an independent research and publishing firm specializing in the collection and dissemination of data on the banking, thrift and financial services industries. The MSCI US REIT Index is published by Morgan Stanley Capital International Inc., a provider of equity indices. The indices are weighted for all companies that fit the definitional criteria of the particular index and are calculated to exclude companies as they are acquired and add them to the index calculation as they become publicly traded companies. All companies of the definitional criteria in existence at the point in time presented are included in the index calculations. The graph assumes the investment of $100 in our Common Stock and in each index on December 31, 2001, and that all dividends paid have been reinvested.


	Period Ending
Index	12/31/01		12/31/02		12/31/03		12/31/04		12/31/05		12/31/06
AIMCO		100.00		88.49		88.65		106.65		113.27		175.76
S&P 500		100.00		77.90		100.24		11.14		116.59		135.00
NASDAQ Composite		100.00		68.76		103.67		113.16		115.57		127.58
SNL Residential REITS Index		100.00		94.37		118.81		157.59		179.03		250.45
MSCI US REIT Index		100.00		103.64		141.73		186.35		208.96		284.02

The Performance Graph will not be deemed to be incorporated by reference into any filing by the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates the same by reference.


Item 6.	*Selected Financial Data*

The following selected financial data is based on our audited historical financial statements. This information should be read in conjunction with such financial statements, including the notes thereto, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included herein or in previous filings with the Securities and Exchange Commission.


	For the Years Ended December 31,
	2006(1)			2005(2)			2004(2)			2003(2)			2002(2)
	(Dollar amounts in thousands, except per share data)

OPERATING DATA:
Total revenues	$	1,690,994		$	1,408,464		$	1,279,205		$	1,207,131		$	1,105,589
Total operating expenses		(1,353,841	)		(1,129,076	)		(994,970	)		(846,507	)		(704,421	)
Operating income		337,153			279,388			284,235			360,624			401,168
Income (loss) from continuing operations		(42,674	)		(23,123	)		57,785			59,609			132,946
Income from discontinued operations, net		219,461			94,105			209,669			99,248			36,100
Cumulative effect of change in accounting principle		—			—			(3,957	)		—			—
Net income		176,787			70,982			263,497			158,857			169,046
Net income attributable to preferred stockholders		81,132			87,948			88,804			93,565			93,558
Net income (loss) attributable to common stockholders		95,655			(16,966	)		174,693			65,292			75,488
OTHER INFORMATION:
Total consolidated properties (end of period)		703			619			676			679			728
Total consolidated apartment units (end of period)		162,432			158,548			169,932			174,172			187,506
Total unconsolidated properties (end of period)		102			264			330			441			511
Total unconsolidated apartment units (end of period)		11,791			35,269			44,728			62,823			73,924
Units managed for others (end of period)(3)		42,190			46,667			49,074			50,565			56,722
Earnings (loss) per common share — basic:
Income (loss) from continuing operations (net of income attributable to preferred stockholders)	$	(1.29	)	$	(1.18	)	$	(0.33	)	$	(0.37	)	$	0.46
Net income (loss) attributable to common stockholders	$	1.00		$	(0.18	)	$	1.88		$	0.70		$	0.88
Earnings (loss) per common share — diluted:
Income (loss) from continuing operations (net of income attributable to preferred stockholders)	$	(1.29	)	$	(1.18	)	$	(0.33	)	$	(0.37	)	$	0.45
Net income (loss) attributable to common stockholders	$	1.00		$	(0.18	)	$	1.88		$	0.70		$	0.87
Dividends declared per common share	$	2.40		$	3.00		$	2.40		$	2.84		$	3.28
BALANCE SHEET INFORMATION:
Real estate, net of accumulated depreciation	$	9,081,218		$	8,189,238		$	7,672,449		$	7,079,098		$	6,907,139
Total assets		10,289,775			10,019,160			10,074,316			10,087,394			10,309,101
Total indebtedness		6,872,753			6,021,857			5,372,870			5,040,912			4,867,271
Stockholders’ equity	��	2,339,892			2,716,103			3,008,160			2,860,657			3,163,387


(1)		Based on circumstances and analysis that occurred after the date of our Fourth Quarter 2006 Earnings Release, we recorded a $2.9 million cumulative adjustment for the year ended December 31, 2006, which adjustment was based on an alternative valuation methodology and revised assumptions for certain High Performance Units of the Aimco Operating Partnership. As a result of this adjustment and the related impact on minority interest in the Aimco Operating Partnership, certain amounts reported in our 2006 consolidated financial statements differ from the corresponding amounts that were previously reported in our Fourth Quarter 2006 Earnings Release. This adjustment reduced our 2006 net income and stockholders’ equity by approximately $2.6 million and reduced basic and diluted earnings per share by $0.03. SeeHigh Performance Units in Note 10 to the consolidated financial statements in Item 8.


(2)		Certain reclassifications have been made to conform to the 2006 presentation. These reclassifications primarily represent presentation changes related to discontinued operations resulting from the 2002 adoption of Statement of Financial Accounting Standards No. 144.

(3)		In 2006, 2005, 2004, 2003 and 2002 includes 38,617, 41,421, 41,233, 39,428 and 45,187 units, respectively, for which we provide asset management services only, although in certain cases we may indirectly own generally less than one percent of the operations of such properties through a partnership syndication or other fund.


Item 7.	*Management’s Discussion and Analysis of Financial Condition and Results of Operations*

Executive Overview

We are a self-administered and self-managed real estate investment trust, or REIT, engaged in the ownership, acquisition, management and redevelopment of apartment properties. Our property operations are characterized by diversification of product, location and price point. As of December 31, 2006, we owned or managed 1,256 apartment properties containing 216,413 units located in 46 states, the District of Columbia and Puerto Rico. Our primary sources of income and cash are rents associated with apartment leases.

The key financial indicators that we use in managing our business and in evaluating our financial condition and operating performance are: Funds From Operations, or FFO; FFO less spending for Capital Replacements, or AFFO; net asset value; same store property operating results; net operating income; net operating income less spending for Capital Replacements, or Free Cash Flow; financial coverage ratios; and leverage as shown on our balance sheet. These terms are defined and described in the sections captioned “Funds From Operations” and “Capital Expenditures” below. The key macro-economic factors and non-financial indicators that affect our financial condition and operating performance are: rates of job growth; single-family and multifamily housing starts; and interest rates.

Because our operating results depend primarily on income from our properties, the supply and demand for apartments influences our operating results. Additionally, the level of expenses required to operate and maintain our properties, the pace and price at which we redevelop, acquire and dispose of our apartment properties, and the volume and timing of fee transactions affect our operating results. Our cost of capital is affected by the conditions in the capital and credit markets and the terms that we negotiate for our equity and debt financings.

Our focus in 2006 has been to increase revenue and implement cost management and productivity initiatives, which includes centralizing purchasing, restructuring business processes, using technology to increase efficiency and implementing structured monthly reporting to identify issues and improve effectiveness of spending. We believe that our efforts are having their intended effect, and have resulted in positive operating results and built the foundation for improved long-term operating results. These initiatives and others have also resulted in improved asset quality, and we will continue to seek opportunities to reinvest in our properties through capital expenditures and to manage our portfolio through property sales and acquisitions.

For 2007, our focus will continue to include the following: enhance operations to improve and sustain customer satisfaction; obtain rate and occupancy increases to bring improved profitability; upgrade the quality of our portfolio through portfolio management, capital replacement, capital improvement and redevelopment; increase efficiency through improved business processes and automation; improve balance sheet flexibility; expand the use of tax credit equity to finance redevelopment of affordable properties; minimize our cost of capital; and monetize a portion of the value inherent in our properties with increased entitlements.

The following discussion and analysis of the results of our operations and financial condition should be read in conjunction with the financial statements.

Results of Operations

Overview

2006 compared to 2005

We reported net income of $176.8 million and net income attributable to common stockholders of $95.7 million for the year ended December 31, 2006, compared to net income of $71.0 million and net loss attributable to common stockholders of $17.0 million for the year ended December 31, 2005, increases of $105.8 million and $112.7 million, respectively. These increases were principally due to the following items, all of which are discussed in further detail within this section:


	•	an increase in net operating income associated with property operations, reflecting improved operations of our same store properties and other properties, and a large number of newly consolidated properties;


	•	an increase in income from discontinued operations, primarily related to higher net gains on dispositions of real estate; and

	•	an increase in gain on disposition of unconsolidated real estate and other, including higher gains on sale of land parcels.

These increases were partially offset by:


	•	an increase in depreciation and amortization expense;

	•	an increase in interest expense; and

	•	unfavorable changes in the effects of minority interests in our consolidated real estate partnerships.

Our reported operating results for 2006 were affected significantly by our adoption of EITF04-5, as discussed inAdoption of EITF04-5in Note 2 to the consolidated financial statements in Item 8. In accordance with the requirements of EITF04-5, we consolidated 156 previously unconsolidated entities as of January 1, 2006. The consolidation of these entities contributed to increases in the reported amounts of certain revenue and expenses.

2005 compared to 2004

We reported net income of $71.0 million and net loss attributable to common stockholders of $17.0 million for the year ended December 31, 2005, compared to net income of $263.5 million and net income attributable to common stockholders of $174.7 million for the year ended December 31, 2004, decreases of $192.5 million and $191.7 million, respectively. These decreases were principally due to the following items, all of which are discussed in further detail within this section:


	•	a decrease in income from discontinued operations, primarily related to lower net gains on dispositions of real estate;

	•	a decrease in gain on disposition of unconsolidated real estate and other, primarily related to a 2004 gain on sale of land;

	•	an increase in depreciation and amortization expense;

	•	an increase in interest expense; and

	•	an increase in general and administrative expenses.

These decreases were partially offset by an increase in net operating income associated with property operations, which included increases related to acquisition, newly consolidated and same store properties.

The following paragraphs discuss these and other items affecting the results of our operations in more detail.

Rental Property Operations

Our operating income is generated primarily from the operations of our consolidated apartment properties. The following table summarizes the overall performance of our properties for the years ended December 31, 2006, 2005 and 2004 (in thousands):


	2006		2005		2004

Rental and other property revenues	$	1,629,988	$	1,346,587	$	1,211,865
Property operating expenses		758,128		633,984		567,937

Net operating income	$	871,860	$	712,603	$	643,928

For the year ended December 31, 2006, compared to the year ended December 31, 2005, net operating income for our consolidated property operations increased by $159.3 million, or 22.3%. The majority of this increase is attributable to newly consolidated properties (143 properties first consolidated in 2006 and 15 properties first consolidated in 2005), which contributed net operating income of $89.2 million in 2006. Newly consolidated properties are properties that: (i) were consolidated for all or part of the current year, (ii) were unconsolidated and

accounted for by the equity method for all or part of the corresponding prior year, and (iii) were not sold or classified as held for sale during the current year. The consolidation of properties upon adoption of EITF04-5 resulted in an unusually large number of newly consolidated properties in 2006 (see Note 2 to the consolidated financial statements in Item 8). The increase in rental property net operating income also reflects: a $44.6 million increase for consolidated same store properties (see “Conventional Same Store Property Operating Results” below); a $9.5 million increase related to operations of the acquisition properties, consisting of nine properties purchased in 2006 and six properties (including the Palazzo East at Park La Brea) purchased in 2005; a $6.2 million improvement in our affordable property operations; and a $5.4 million increase related to properties undergoing redevelopment.

For the year ended December 31, 2005, compared to the year ended December 31, 2004, net operating income for our consolidated property operations increased by $68.7 million, or 10.7%. This increase was principally due to a $40.3 million increase in consolidated same store net operating income (see “Conventional Same Store Property Operating Results” below); a $21.3 million increase related to operations of acquisition properties, which were principally comprised of Palazzo East at Park La Brea and five other properties purchased in 2005 and The Palazzo at Park La Brea and 10 other properties purchased in 2004; a $10.6 million increase related to operations of newly consolidated properties (15 properties first consolidated in 2005 and 36 properties first consolidated in 2004); a $3.9 million increase related to operations of our affordable properties; and a $2.7 million increase related to the completion of certain redevelopment properties. These increases were offset by $6.4 million of increased property management expenses and $3.3 million of higher net casualty losses in 2005 as compared to 2004, primarily relating to greater hurricane and tropical storm damage that occurred in 2005.

Conventional Same Store Property Operating Results

Same store operating results is a key indicator we use to assess the performance of our property operations and to understand the period over period operations of a consistent portfolio of properties. We define “consolidated same store” properties as conventional properties (i) that we manage, (ii) in which our ownership interest exceeds 10%, (iii) the operations of which have been stabilized for all periods presented, and (iv) that have not been classified as held for sale. The following tables summarize the operations of our consolidated conventional rental property operations:


	Year Ended December 31,
	2006			2005			Change

Consolidated same store revenues	$	1,075,434		$	1,007,789			6.7%
Consolidated same store expenses		458,449			435,370			5.3%

Same store net operating income		616,985			572,419			7.8%
Reconciling items(1)		254,875			140,184			81.8%

Real estate segment net operating income	$	871,860		$	712,603			22.3%

Same store operating statistics:
Properties		365			365
Apartment units		107,430			107,430
Average physical occupancy		94.4	%		92.4	%		2.0%
Average rent/unit/month	$	811		$	782			3.7%


(1)		Reflects property revenues and property operating expenses related to consolidated properties other than same store properties (e.g., affordable, acquisition, redevelopment and newly consolidated properties, including those properties consolidated as a result of the adoption of EITF 04-5) and casualty gains and losses.

For the year ended December 31, 2006, compared to the year ended December 31, 2005, consolidated same store net operating income increased $44.6 million, or 7.8%. Revenues increased $67.6 million, or 6.7%, primarily due to higher occupancy (up 2.0%), higher average rent (up $29 per unit) and a $7.5 million increase in utility reimbursements. Expenses increased by $23.1 million, or 5.3%, primarily due to a $6.5 million increase in real

estate taxes, a $6.2 million increase in utilities, a $4.8 million increase in insurance, and a $3.0 million increase in employee compensation and related expenses.


	Year Ended December 31,
	2005			2004			Change

Consolidated same store revenues	$	988,952		$	925,806			6.8%
Consolidated same store expenses		428,218			405,370			5.6%

Same store net operating income		560,734			520,436			7.7%
Reconciling items(1)		151,869			123,502			23.0%

Real estate segment net operating income	$	712,603		$	643,938			10.7%

Same store operating statistics:
Properties		357			357
Apartment units		105,472			105,472
Average physical occupancy		92.4	%		90.1	%		2.3%
Average rent/unit/month	$	782		$	753			3.9%


(1)		Reflects property revenues and property operating expenses related to consolidated properties other than same store properties (e.g., affordable, acquisition, redevelopment and newly consolidated properties) and casualty gains and losses.

For the year ended December 31, 2005, compared to the year ended December 31, 2004, consolidated same store net operating income increased $40.3 million, or 7.7%. Revenues increased $63.1 million, or 6.8%, primarily due to higher occupancy (up 2.3%), higher average rent (up $29 per unit), and a $9.4 million decrease in bad debt expense. Expenses increased by $22.8 million, or 5.6%, primarily due to a $7.7 million increase in real estate taxes, a $6.6 million increase in employee compensation and related expenses, and a $6.0 million increase in utilities.

Property Management

We earn income from property management primarily from certain unconsolidated real estate partnerships for which we are the general partner. The income is primarily in the form of fees generated through property management and other associated activities. Reported revenue from property management decreases as we consolidate real estate partnerships because it is eliminated in consolidation. We expect this trend to continue as we increase our ownership in more of these partnerships or otherwise determine that consolidation is required by GAAP. Additionally, our revenue decreases as properties within our unconsolidated real estate partnerships are sold. Offsetting the revenue earned in property management are the direct expenses associated with property management.

The following table summarizes the overall performance of our property management business for the years ended December 31, 2006, 2005 and 2004 (in thousands):


	2006		2005		2004

Property management revenues, primarily from affiliates	$	12,312	$	24,528	$	32,461
Property management expenses		4,912		7,361		9,789

Net operating income from property management	$	7,400	$	17,167	$	22,672

For the year ended December 31, 2006, compared to the year ended December 31, 2005, net operating income from property management decreased by $9.8 million, or 56.9%. For the year ended December 31, 2005, compared to the year ended December 31, 2004, net operating income from property management decreased by $5.5 million, or 24.3%. In both comparisons the decreases were principally due to reductions in the numbers of unaffiliated and unconsolidated real estate partnerships that we managed. Most of these decreases resulted from the consolidation of partnerships due to increased ownership and GAAP requirements (including the adoption of EITF04-5 in 2006 as discussed inAdoption of EITF04-5in Note 2 to the consolidated financial statements in Item 8), which required

elimination of fee income and reclassification of related property management expenses. Sales of properties by unconsolidated partnerships also contributed to the decreases in income from property management.

Activity Fees and Asset Management

Activity fees are generated from transactions, including dispositions, refinancings, sales promotes and tax credit syndications and redevelopments. These transactions occur on varying timetables, thus the income varies from period to period. The majority of these fees are realized in connection with transactions related to affordable properties within the Aimco Capital portfolio. We have a large number of affiliated real estate partnerships for which we have identified a pipeline of transactional opportunities. As a result, we view activity fees as a predictable part of our core business strategy. Asset management revenue is from the financial management of partnerships, rather than management ofday-to-day property operations. Asset management revenue includes certain fees that were earned in a prior period, but not recognized at that time because collectibility was not reasonably assured. Those fees may be recognized in a subsequent period upon occurrence of a transaction or improvement in operations that generates sufficient cash to pay the fees. Activity and asset management expenses are the direct expenses associated with transactional activities and asset management. These activities are conducted primarily by our taxable subsidiaries and the related operating income is generally subject to income taxes. As discussed inTax Credit Arrangements in Note 2 to the consolidated financial statements in Item 8, in 2006 we revised our treatment of income from certain tax credit arrangements.

The following table summarizes the operating results of our transactional and asset management activities for the years ended December 31, 2006, 2005 and 2004, excluding related income tax effects (in thousands):


	2006		2005		2004

Activity fees and asset management revenues	$	48,694	$	37,349	$	34,879
Activity and asset management expenses		9,521		10,628		11,879

Net operating income from activity fees and asset management	$	39,173	$	26,721	$	23,000

Included in the activity fees and asset management revenues, primarily from affiliates for the years ended December 31, 2006, 2005 and 2004, were $41.4 million, $33.3 million and $30.3 million, respectively, of fees related to affordable properties within the Aimco Capital portfolio.

For the year ended December 31, 2006, compared to the year ended December 31, 2005, net operating income from activity fees and asset management increased $12.5 million, or 46.6%. This increase is primarily attributable to growth in our affordable housing tax credit syndication business, including a $4.3 million increase in syndication fees and a $4.6 million increase in other revenue earned in connection with these arrangements. The increase also reflects a $2.4 million increase in promote distributions from partnerships.

For the year ended December 31, 2005, compared to the year ended December 31, 2004, net operating income from activity fees and asset management increased by $3.7 million, or 16.2%. This overall increase was principally a result of increased activity fees related to syndication and developer activities of $6.0 million and $3.7 million, respectively, as well as a $1.3 million decrease in expenses associated with these activities. Additionally, we received $3.1 million in promote distributions from an unconsolidated partnership, as a result of us, as general partner, achieving financial returns to the limited partners in excess of established targets. These increases were offset by a $5.2 million decrease in asset management fees and decreases of $3.3 million and $1.9 million in activity fees related to disposition and refinancing activities, respectively.

Depreciation and Amortization

For the year ended December 31, 2006, compared to the year ended December 31, 2005, depreciation and amortization increased $94.4 million, or 25.1%. This increase was principally due to $39.7 million of depreciation for newly consolidated properties, particularly properties that were consolidated in 2006 in connection with the adoption of EITF04-5 (seeAdoption of EITF04-5in Note 2 to the consolidated financial statements in Item 8) and $46.2 million of depreciation related to assets recently placed in service, including acquired properties, redevelopment projects and other capital expenditures. Additionally, a $4.8 million increase resulted from a change

effective July 1, 2005 in estimated useful lives that apply to capitalized payroll and certain indirect costs (seeCapital Expenditures and Related Depreciationin Note 2 of the consolidated financial statements in Item 8).

For the year ended December 31, 2005, compared to the year ended December 31, 2004, depreciation and amortization increased $60.8 million, or 19.3%. This increase was principally due to $31.9 million of additional depreciation on certain real estate assets where the depreciation was adjusted prospectively (seeImpairment of Long-Lived Assetsin Note 2 of the consolidated financial statements in Item 8); $13.8 million and $8.3 million of additional depreciation related to newly consolidated and acquisition properties, respectively; and $11.0 million from the completion of certain redevelopment projects. Additionally, $4.3 million of the increase was due to a change in estimated useful lives that apply to capitalized payroll and certain indirect costs (seeCapital Expenditures and Related Depreciationin Note 2 of the consolidated financial statements in Item 8).

General and Administrative Expenses

For the year ended December 31, 2006, compared to the year ended December 31, 2005, general and administrative expenses increased $8.9 million, or 9.6%. This increase reflects a $9.6 million increase in employee compensation and related costs, including higher stock-based compensation and variable compensation based on achievement of established performance targets. The increase was partially offset by a $3.9 million decrease in legal, audit and consulting expenses. In addition, in 2006 we recorded a $2.9 million adjustment based on an alternative method and revised assumptions for the valuation of High Performance Units (seeHigh Performance Units in Note 10 to the consolidated financial statements in Item 8).

For the year ended December 31, 2005, compared to the year ended December 31, 2004, general and administrative expenses increased $15.4 million, or 19.9%. This increase was principally due to $14.1 million in higher compensation related to increased staffing levels, increased health care costs, and transition costs associated with the chief financial and chief accounting officer positions. Additionally, in 2005 we accrued $0.6 million in severance costs related to the restructuring of regional operating centers as a result of property dispositions.

Other Expenses (Income), Net

Other expenses (income), net includes income tax provision/benefit, franchise taxes, risk management activities related to our unconsolidated partnerships, partnership administration expenses and various other items.

For the year ended December 31, 2006, compared to the year ended December 31, 2005, other expenses (income), net increased by $0.9 million, or 11.6%. This increase was primarily attributable to a $4.9 million decrease in the income tax benefit for our continuing operations, reflecting smaller losses of our taxable REIT subsidiaries (see Note 9 to the consolidated financial statements in Item 8). The decrease was partially offset by net favorable legal settlements and adjustments to accruals for loss contingencies.

For the year ended December 31, 2005, compared to the year ended December 31, 2004, other expenses (income), net decreased by $4.4 million, or 35.6%. This decrease was principally due to a $9.5 million higher income tax benefit for our continuing operations, reflecting increased losses of our taxable REIT subsidiaries (see Note 9 to the consolidated financial statements in Item 8). The decrease in other expenses was partially offset by a $3.8 million increase in partnership expenses, which was largely the result of higher professional fees, and other expenses increases and reclassifications.

Interest Income

Interest income consists primarily of interest on notes receivable from non-affiliates and unconsolidated real estate partnerships, interest on cash and restricted cash accounts, and accretion of discounts on certain notes receivable from unconsolidated real estate partnerships. Transactions that result in accretion occur infrequently and thus accretion income may vary from period to period.

For the year ended December 31, 2006, as compared to the year ended December 31, 2005, interest income increased $1.3 million, or 4.2%. This increase reflects $8.0 million in interest income on cash and restricted cash balances of newly consolidated properties, particularly properties consolidated as a result of adopting EITF04-5 in 2006 (seeAdoption of EITF04-5in Note 2 the consolidated financial statements in Item 8). The increase also

reflects a $4.6 million increase in interest income related to increased balances of notes receivable from non-affiliates (see Note 5 to the consolidated financial statements in Item 8) and $4.2 million of accretion income in connection with two property sales in 2006. These increases were largely offset by the elimination of $14.0 million in interest income on notes receivable from real estate partnerships that were consolidated in 2006 in connection with the adoption of EITF04-5.

For the year ended December 31, 2005, as compared to the year ended December 31, 2004, interest income decreased $1.1 million, or 3.4%. This decrease was principally the result of a $3.8 million reduction in accretion income, partially offset by higher interest income from money market and interest-bearing accounts due to increased interest rates and higher cash balances.

Interest Expense

For the year ended December 31, 2006, compared to the year ended December 31, 2005, interest expense, which includes the amortization of deferred financing costs, increased $64.7 million, or 18.9%. This increase reflects $35.4 million in interest expense of newly consolidated properties, particularly those consolidated as a result of adopting EITF04-5 in 2006 (seeAdoption of EITF04-5in Note 2 the consolidated financial statements in Item 8). Additionally, interest expense on property debt increased by $33.9 million due to higher interest rates on variable rate loans, higher average balances related to refinancings and acquisitions. These increases were partially offset by a $6.9 million increase in capitalized interest, reflecting an increase in properties undergoing redevelopment and construction.

For the year ended December 31, 2005, compared to the year ended December 31, 2004, interest expense increased $25.3 million, or 8.0%. This increase was principally due to interest on the additional debt related to acquisition and newly consolidated properties $16.0 million and $5.0 million, respectively, and a $17.7 million increase due to higher borrowings and interest rates on variable rate debt. These increases were partially offset by $4.8 million in lower amortization of loan costs, primarily due to corporate debt restructuring in 2005, $8.6 million in higher capitalized interest due to increased redevelopment activity, and a $2.1 million decrease related to the redemption of mandatorily redeemable preferred securities in 2004 and early 2005.

Deficit Distributions to Minority Partners

When real estate partnerships consolidated in our financial statements make cash distributions to partners in excess of the carrying amount of the minority interest, we record a charge equal to the excess amount, even though there is no economic effect or cost.

For the year ended December 31, 2006, as compared to the year ended December 31, 2005, deficit distributions to minority partners increased $9.4 million, or 80.8%. This increase reflects higher levels of distributions to minority interests in 2006, including several large distributions in connection with debt refinancing transactions.

For the year ended December 31, 2005, as compared to the year ended December 31, 2004, deficit distributions to minority partners decreased $5.8 million, or 33.1%. This decrease was due to reduced levels of distributions being made by our consolidated real estate partnerships as a result of lower refinancing activity, decreased operating results, and our increased ownership of certain partnerships.

Gain on Dispositions of Unconsolidated Real Estate and Other

Gain on dispositions of unconsolidated real estate and other includes our share of gains related to dispositions of real estate by unconsolidated real estate partnerships, gains on dispositions of investments in unconsolidated real estate partnerships, gains on dispositions of land and other non-depreciable assets, and costs related to asset disposal activities. The amounts of reported gains reflect the changing level of our disposition activity and may vary from period to period. Losses incurred in connection with these transactions are reported separately as impairments.

For the year ended December 31, 2006, as compared to the year ended December 31, 2005, gain on dispositions of unconsolidated real estate and other increased $15.6 million. This increase is primarily attributable to an $11.0 million gain on the disposition of our interest in an unconsolidated joint venture that owned and operated several student housing properties and a $9.0 million increase in gains on disposition of land and other non-

depreciable assets. These increases were partially offset by a decrease in our share of gains on sales of real estate by unconsolidated partnerships.

For the year ended December 31, 2005, as compared to the year ended December 31, 2004, gain on dispositions of unconsolidated real estate and other decreased $50.3 million. This decrease reflects a $34.6 million gain on the sale of a parcel of land located in Florida and $17.4 million representing our share of a gain from the sale of an unconsolidated core property, both of which occurred in 2004.

Minority Interest in Consolidated Real Estate Partnerships

Minority interest in consolidated real estate partnerships reflects minority partners’ share of operating results of consolidated real estate partnerships. This generally includes the minority partners’ share of property management fees, interest on notes and other amounts eliminated in consolidation that we charge to such partnerships. However, we generally do not recognize a benefit for the minority interest share of partnership losses for partnerships that have deficits in partners’ equity.

For the year ended December 31, 2006, as compared to the year ended December 31, 2005, minority interest in consolidated real estate partnerships changed unfavorably by $24.7 million. This change is primarily attributable to our recognition of $25.0 million for minority partners’ share of losses of partnerships with deficits in equity as a result of adopting EITF04-5 in 2006 (seeAdoption of EITF04-5in Note 2 to the consolidated financial statements in Item 8). The change also reflects differences related to our revised accounting treatment for tax credit arrangements (seeTax Credit Arrangements in Note 2 to the consolidated financial statements in Item 8), including (i) the reversal in 2006 of a previously recognized benefit of $9.0 million for losses of tax credit partnerships that were allocated to minority interests in prior years, but which are absorbed by us under our revised accounting treatment and (ii) a $6.7 million benefit recognized in 2005 for losses allocated to minority interests in tax credit partnerships, while no comparable amount was recognized in 2006 under our revised accounting treatment. These unfavorable changes were partially offset by a $16.0 million net increase in the minority interest share of other real estate partnership losses.

For the year ended December 31, 2005, as compared to the year ended December 31, 2004, the benefit from minority interest in consolidated real estate partnerships decreased $9.6 million. This decrease was driven by general improvement in property operating results during 2005 as compared to 2004, which resulted in minority interests absorbing a lower amount of partnership losses.

Income from Discontinued Operations, Net

For properties accounted for as held for sale, the results of operations for properties sold during the period or designated as held for sale at the end of the period are generally required to be classified as discontinued operations for all periods presented. The components of net earnings that are classified as discontinued operations include all property-related revenues and operating expenses, depreciation expense recognized prior to the classification as held for sale, property-specific interest expense to the extent there is secured debt on the property, and any related minority interest. In addition, any impairment losses on assets held for sale, and the net gain on the eventual disposal of properties held for sale are reported in discontinued operations.

For the years ended December 31, 2006, 2005, and 2004, income from discontinued operations, net totaled $219.5 million, $94.1 million and $209.7 million, respectively, which includes losses from operations of $0.8 million and $4.5 million in 2006 and 2005, respectively, and income from operations of $5.4 million in 2004. For 2006, the income from operations included the operating results of 77 properties and one tower of the Flamingo South Beach property (the South Tower) that were sold during 2006. For 2005 and 2004, the income from operations included the operating results of 160 properties and 214 properties, respectively, that were sold or classified as held for sale in 2004, 2005 and 2006. Due to varying number of properties and the timing of sales, the income from operations is not comparable year to year.

During 2006, we sold 77 properties and the South Tower, resulting in a net gain on sale of approximately $227.3 million (which is net of $32.9 million of related income taxes). Additionally, we recognized $0.4 million in impairment recoveries on assets sold in 2006 and $15.9 million of net recoveries of deficit distributions to minority

partners. During 2005, we sold 83 properties, resulting in a net gain on sale of approximately $98.5 million (which is net of $4.5 million of related income taxes). Additionally, we recognized $3.8 million in impairment losses on assets sold or held for sale in 2005 and $14.6 million of net recoveries of deficit distributions to minority partners. During 2004, we sold 54 properties, resulting in a net gain on sale of approximately $233.3 million (which is net of $16.0 million of related income taxes). Additionally, we recognized $7.3 million in impairment losses on assets sold or held for sale in 2004 and $3.2 million of net recoveries of deficit distributions to minority partners.

Changes in the level of gains recognized from period to period reflect the changing level of our disposition activity from period to period. Additionally, gains on properties sold are determined on an individual property basis or in the aggregate for a group of properties that are sold in a single transaction, and are not comparable period to period. See Note 13 of the consolidated financial statements in Item 8 for additional information on discontinued operations.

Cumulative Effect of Change in Accounting Principle

On March 31, 2004, we recorded a $4.0 million cumulative effect of change in accounting principle related to the adoption of FIN 46. This charge is attributable to our recognition of cumulative losses allocable to minority interest that would otherwise have resulted in minority interest deficits. See Note 2 of the consolidated financial statements in Item 8 for further information.

Critical Accounting Policies and Estimates

We prepare our consolidated financial statements in accordance with GAAP, which requires us to make estimates and assumptions. We believe that the following critical accounting policies involve our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Impairment of Long-Lived Assets

Real estate and other long-lived assets to be held and used are stated at cost, less accumulated depreciation and amortization, unless the carrying amount of the asset is not recoverable. If events or circumstances indicate that the carrying amount of a property may not be recoverable, we make an assessment of its recoverability by comparing the carrying amount to our estimate of the undiscounted future cash flows, excluding interest charges, of the property. If the carrying amount exceeds the aggregate undiscounted future cash flows, we recognize an impairment loss to the extent the carrying amount exceeds the estimated fair value of the property.

Real estate investments are subject to varying degrees of risk. Several factors may adversely affect the economic performance and value of our real estate investments. These factors include:


	•	the general economic climate;

	•	competition from other apartment communities and other housing options;

	•	local conditions, such as loss of jobs or an increase in the supply of apartments, that might adversely affect apartment occupancy or rental rates;

	•	changes in governmental regulations and the related cost of compliance;

	•	increases in operating costs (including real estate taxes) due to inflation and other factors, which may not be offset by increased rents;

	•	changes in tax laws and housing laws, including the enactment of rent control laws or other laws regulating multifamily housing;

	•	changes in market capitalization rates; and

	•	the relative illiquidity of such investments.

Any adverse changes in these and other factors could cause an impairment in our long-lived assets, including real estate and investments in unconsolidated real estate partnerships. Based on periodic tests of recoverability of long-lived assets, for the year ended December 31, 2005, we recorded impairment losses of $3.4 million related to

properties to be held and used. For the years ended December 31, 2006 and 2004, we determined that the carrying amount for our properties to be held and used was recoverable and, therefore, we did not record any impairment losses related to such properties.

Notes Receivable and Interest Income Recognition

Notes receivable from unconsolidated real estate partnerships consist primarily of notes receivable from partnerships in which we are the general partner. The ultimate repayment of these notes is subject to a number of variables, including the performance and value of the underlying real estate property and the claims of unaffiliated mortgage lenders. Our notes receivable include loans extended by us that we carry at the face amount plus accrued interest, which we refer to as “par value notes,” and loans extended by predecessors whose positions we generally acquired at a discount, which we refer to as “discounted notes.”

We record interest income on par value notes as earned in accordance with the terms of the related loan agreements. We discontinue the accrual of interest on such notes when the notes are impaired, as discussed below, or when there is otherwise significant uncertainty as to the collection of interest. We record income on such nonaccrual loans using the cost recovery method, under which we apply cash receipts first to the recorded amount of the loan; thereafter, any additional receipts are recognized as income.

We recognize interest income on discounted notes receivable based upon whether the amount and timing of collections are both probable and reasonably estimable. We consider collections to be probable and reasonably estimable when the borrower has entered into certain closed or pending transactions (which include real estate sales, refinancings, foreclosures and rights offerings) that provide a reliable source of repayment. In such instances, we recognize accretion income, on a prospective basis using the effective interest method over the estimated remaining term of the loans, equal to the difference between the carrying amount of the discounted notes and the estimated collectible value. We record income on all other discounted notes using the cost recovery method. Accretion income recognized in any given period is based on our ability to complete transactions to monetize the notes receivable and the difference between the carrying value and the estimated collectible value of the notes; therefore, accretion income varies on a period by period basis and could be lower or higher than in prior periods.

Allowance for Losses on Notes Receivable

We assess the collectibility of notes receivable on a periodic basis, which assessment consists primarily of an evaluation of cash flow projections of the borrower to determine whether estimated cash flows are sufficient to repay principal and interest in accordance with the contractual terms of the note. We recognize impairments on notes receivable when it is probable that principal and interest will not be received in accordance with the contractual terms of the loan. The amount of the impairment to be recognized generally is based on the fair value of the partnership’s real estate that represents the primary source of loan repayment. In certain instances where other sources of cash flow are available to repay the loan, the impairment is measured by discounting the estimated cash flows at the loan’s original effective interest rate.

During the year ended December 31, 2006, we identified and recorded an impairment loss on notes receivable of $2.8 million. For the years ended December 31, 2005 and 2004, we recorded net recoveries of $1.4 million and $1.8 million of previously recorded impairment losses on notes receivable, respectively. We will continue to evaluate the collectibility of these notes, and we will adjust related allowances in the future due to changes in market conditions and other factors.

Capitalized Costs

We capitalize costs, including certain indirect costs, incurred in connection with our capital expenditure activities, including redevelopment and construction projects, other tangible property improvements, and replacements of existing property components. Included in these capitalized costs are payroll costs associated with time spent by site employees in connection with the planning, execution and control of all capital expenditure activities at the property level. We characterize as “indirect costs” an allocation of certain department costs, including payroll, at the regional operating center and corporate levels that clearly relate to capital expenditure activities. We capitalize interest, property taxes and insurance during periods in which redevelopment and construction projects

are in progress. Costs incurred in connection with capital expenditure activities are capitalized where the costs of the improvements or replacements exceed $250. We charge to expense as incurred costs that do not relate to capital expenditure activities, including ordinary repairs, maintenance, resident turnover costs and general and administrative expenses. SeeCapital Expenditures and Related Depreciationin Note 2 to the consolidated financial statements in Item 8 for further information.

For the years ended December 31, 2006, 2005 and 2004, for continuing and discontinued operations, we capitalized $24.7 million, $18.1 million and $9.5 million, respectively, of interest costs and $66.2 million, $53.3 million and $46.7 million, respectively of site payroll and indirect costs.

Funds From Operations

Funds From Operations, or FFO, is a non-GAAP financial measure that we believe, when considered with the financial statements determined in accordance with GAAP, is helpful to investors in understanding our performance because it captures features particular to real estate performance by recognizing that real estate generally appreciates over time or maintains residual value to a much greater extent than do other depreciable assets such as machinery, computers or other personal property. The Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT, defines FFO as net income (loss), computed in accordance with GAAP, excluding gains from sales of depreciable property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. We compute FFO for all periods presented in accordance with the guidance set forth by NAREIT’s April 1, 2002, White Paper, which we refer to as the White Paper. We calculate FFO (diluted) by subtracting redemption related preferred stock issuance costs and dividends on preferred stock and adding back dividends/distributions on dilutive preferred securities and interest expense on dilutive mandatorily redeemable convertible preferred securities. FFO should not be considered an alternative to net income or net cash flows from operating activities, as determined in accordance with GAAP, as an indication of our performance or as a measure of liquidity. FFO is not necessarily indicative of cash available to fund future cash needs. In addition, although FFO is a measure used for comparability in assessing the performance of real estate investment trusts, there can be no assurance that our basis for computing FFO is comparable with that of other real estate investment trusts.

For the years ended December 31, 2006, 2005 and 2004, our FFO is calculated as follows (in thousands):


	2006			2005			2004

Net income (loss) attributable to common stockholders(1)	$	95,655		$	(16,966	)	$	174,693
Adjustments:
Depreciation and amortization(2)		470,597			376,231			315,451
Depreciation and amortization related to non-real estate assets		(19,620	)		(17,700	)		(18,349	)
Depreciation of rental property related to minority partners and unconsolidated entities(3)		(4,409	)		(12,474	)		(14,457	)
Depreciation of rental property related to minority partners’ interest — adjustment(4)		7,377			—			—
Gain on dispositions of unconsolidated real estate and other		(34,567	)		(18,958	)		(69,294	)
Gain on dispositions of non-depreciable assets		11,525			2,480			38,977
Deficit distributions to minority partners(5)		21,004			11,615			17,374
Cumulative effect of change in accounting principle		—			—			3,957
Discontinued operations:
Gain on dispositions of real estate, net of minority partners’ interest(3)		(260,206	)		(102,972	)		(249,353	)
Depreciation of rental property, net of minority partners’ interest(3)		16,910			51,897			59,297
Recovery of deficit distributions to minority partners, net(5)		(15,927	)		(14,604	)		(3,231	)
Income tax arising from disposals		32,918			4,481			16,015
Minority interest in Aimco Operating Partnership’s share of above adjustments		(21,721	)		(28,382	)		(10,289	)
Preferred stock dividends		74,284			86,825			85,315
Redemption related preferred stock issuance costs		6,848			1,123			3,489

Funds From Operations	$	380,668		$	322,596		$	349,595
Preferred stock dividends		(74,284	)		(86,825	)		(85,315	)
Redemption related preferred stock issuance costs		(6,848	)		(1,123	)		(3,489	)
Dividends/distributions on dilutive preferred securities		202			168			2,798

Funds From Operations attributable to common stockholders — diluted	$	299,738		$	234,816		$	263,589

Weighted average number of common shares, common share equivalents and dilutive preferred securities outstanding:
Common shares and equivalents(6)		98,451			94,465			93,252
Dilutive preferred securities		71			74			1,106

Total		98,522			94,539			94,358

Notes:


(1)		Represents the numerator for earnings per common share, calculated in accordance with GAAP. Based on circumstances and analysis that occurred after the date of our Fourth Quarter 2006 Earnings Release, we recorded a $2.9 million cumulative adjustment for the year ended December 31, 2006, which adjustment was based on an alternative valuation methodology and revised assumptions for certain High Performance Units of the Aimco Operating Partnership. As a result of this adjustment and the related impact on minority interest in the Aimco Operating Partnership, our net income attributable to common stockholders and Funds From Operations for the year ended December 31, 2006, is approximately $2.6 million lower than the corresponding amounts previously reported in our Fourth Quarter 2006 Earnings Release. SeeHigh Performance Units in Note 10 to the consolidated financial statements in Item 8.


(2)		Includes amortization of management contracts where we are the general partner. Such management contracts were established in certain instances where we acquired a general partner interest in either a consolidated or an unconsolidated partnership. Because the recoverability of these management contracts depends primarily on the operations of the real estate owned by the limited partnerships, we believe it is consistent with the White Paper to add back such amortization, as the White Paper directs the add-back of amortization of assets uniquely significant to the real estate industry.

(3)		“Minority partners’ interest,” means minority interest in our consolidated real estate partnerships.

(4)		Represents prior period depreciation of certain tax credit redevelopment properties that Aimco included in an adjustment to minority interest in real estate partnerships for the year ended December 31, 2006 (SeeTax Credit Arrangementsin Note 2 to the consolidated financial statements). This prior period depreciation is added back to determine FFO in accordance with the NAREIT White Paper.

(5)		In accordance with GAAP, deficit distributions to minority partners are charges recognized in our income statement when cash is distributed to a non-controlling partner in a consolidated real estate partnership in excess of the positive balance in such partner’s capital account, which is classified as minority interest on our balance sheet. We record these charges for GAAP purposes even though there is no economic effect or cost. Deficit distributions to minority partners occur when the fair value of the underlying real estate exceeds its depreciated net book value because the underlying real estate has appreciated or maintained its value. As a result, the recognition of expense for deficit distributions to minority partners represents, in substance, either (a) our recognition of depreciation previously allocated to the non-controlling partner or (b) a payment related to the non-controlling partner’s share of real estate appreciation. Based on White Paper guidance that requires real estate depreciation and gains to be excluded from FFO, we add back deficit distributions and subtract related recoveries in our reconciliation of net income to FFO.

(6)		Represents the denominator for earnings per common share — diluted, calculated in accordance with GAAP, plus additional common share equivalents that are dilutive for FFO.

Liquidity and Capital Resources

Liquidity is the ability to meet present and future financial obligations either through the sale or maturity of existing assets or by the acquisition of additional funds through working capital management. Both the coordination of asset and liability maturities and effective working capital management are important to the maintenance of liquidity. Our primary source of liquidity is cash flow from our operations. Additional sources are proceeds from property sales and proceeds from refinancings of existing mortgage loans and borrowings under new mortgage loans.

Our principal uses for liquidity include normal operating activities, payments of principal and interest on outstanding debt, capital expenditures, dividends paid to stockholders and distributions paid to partners, and acquisitions of, and investments in, properties. We use our cash and cash equivalents and our cash provided by operating activities to meet short-term liquidity needs. In the event that our cash and cash equivalents and our cash provided by operating activities is not sufficient to cover our short-term liquidity demands, we have additional means, such as short-term borrowing availability and proceeds from property sales and refinancings, to help us meet our short-term liquidity demands. We use our revolving credit facility for general corporate purposes and to fund investments on an interim basis. We expect to meet our long-term liquidity requirements, such as debt maturities and property acquisitions, through long-term borrowings, both secured and unsecured, the issuance of debt or equity securities (including OP Units), the sale of properties and cash generated from operations.

At December 31, 2006, we had $229.8 million in cash and cash equivalents, an increase of $68.1 million from December 31, 2005. This increase reflects cash balances of newly consolidated properties and proceeds from sales and refinancing transactions that had not been distributed or applied to the outstanding balance of the revolving credit facility (see Note 8 to the consolidated financial statements in Item 8). At December 31, 2006, we had $347.5 million of restricted cash, primarily consisting of reserves and escrows held by lenders for bond sinking funds, capital expenditures, property taxes and insurance. In addition, cash, cash equivalents and restricted cash are held by partnerships that are not presented on a consolidated basis. The following discussion relates to changes in

cash due to operating, investing and financing activities, which are presented in our consolidated statements of cash flows in Item 8.

Operating Activities

For the year ended December 31, 2006, our net cash provided by operating activities of $532.3 million was primarily from operating income from our consolidated properties, which is affected primarily by rental rates, occupancy levels and operating expenses related to our portfolio of properties. Cash provided by operating activities increased $176.7 million compared with the year ended December 31, 2005, driven by an increase in net income and changes in operating assets and liabilities. The changes in operating assets and liabilities were primarily due to a decrease in restricted cash, net of an increase in restricted cash from newly consolidated properties, and an increase in deferred revenues.

Investing Activities

For the year ended December 31, 2006, our net cash provided by investing activities of $233.0 million primarily resulted from proceeds received from the sales of properties, partially offset by originations of notes receivable relating to the West Harlem transaction, investments in our existing real estate assets through capital spending as well as the acquisition of nine properties (see Note 3 to the consolidated financial statements in Item 8 for further information on acquisitions).

Although we hold all of our properties for investment, we sell properties when they do not meet our investment criteria or are located in areas that we believe do not justify our continued investment when compared to alternative uses for our capital. During the year ended December 31, 2006, we sold 77 consolidated properties and the South Tower of the Flamingo South Beach property. These properties and the South Tower were sold for an aggregate sales price of $1,110.7 million and generated proceeds totaling $958.6 million, after the payment of transaction costs and the assumption of debt. Sales proceeds were used to repay a portion of our outstanding short-term indebtedness and for other corporate purposes.

We are currently marketing for sale certain properties that are inconsistent with our long-term investment strategy. Additionally, from time to time, we may market certain properties that are consistent with our long-term investment strategy but offer attractive returns, such as sales to buyers who intend to convert the properties to condominiums. Gross sales proceeds from 2007 dispositions are expected to be $400 million to $600 million, and we plan to use our share of the net proceeds from such dispositions to reduce debt, fund capital expenditures on existing assets, fund property and partnership acquisitions, potentially repurchase Common Stock and for other operating needs and corporate purposes.

Capital Expenditures

We classify all capital spending as Capital Replacements (which we refer to as CR), Capital Improvements (which we refer to as CI), casualties or redevelopment. Non-redevelopment and non-casualty capitalizable expenditures are apportioned between CR and CI based on the useful life of the capital item under consideration and the period we have owned the property (i.e., the portion that was consumed during our ownership of the item represents CR; the portion of the item that was consumed prior to our ownership represents CI).

For the year ended December 31, 2006, we spent a total of $76.6 million on CR. These are expenditures that represent the share of expenditures that are deemed to replace the consumed portion of acquired capital assets. For the year ended December 31, 2006, we spent a total of $99.2 million, $35.8 million and $230.8 million, respectively, on CI, casualties and redevelopment. CI expenditures represent all non-redevelopment and non-casualty capital expenditures that are made to enhance the value, profitability or useful life of an asset from its original purchase condition. Casualty expenditures represent capitalized costs incurred in connection with casualty losses and are associated with the restoration of the asset. A portion of the restoration costs may be reimbursed by insurance carriers subject to deductibles associated with each loss. Redevelopment expenditures represent expenditures that substantially upgrade the property.

The table below details our share of actual spending, on both consolidated and unconsolidated real estate partnerships, for CR, CI, casualties and redevelopment for the year ended December 31, 2006 on a per unit and total dollar basis (based on approximately 143,054 ownership equivalent units (excluding non-managed units) weighted for the portion of the period that we owned the property), and reconciles it to our consolidated statement of cash flows for the same period (in thousands, except per unit amounts).


	Actual Cost			Cost Per Unit

Capital Replacements Detail:
Building and grounds	$	24,997		$	175
Turnover related		40,002			279
Includes: carpet, vinyl, tile, appliance, and fixture replacements
Capitalized site payroll and indirect costs		11,600			81

Our share of Capital Replacements	$	76,599		$	535

Capital Replacements:
Conventional	$	69,202
Affordable		7,397

Our share of Capital Replacements		76,599

Capital Improvements:
Conventional		83,138
Affordable		16,108
Our share of Capital Improvements		99,246

Casualties:
Conventional		29,756
Affordable		6,088

Our share of casualties		35,844

Redevelopment:
Conventional		177,902
Affordable		52,944

Our share of redevelopment		230,846

Our share of capital expenditures		442,535
Plus minority partners’ share of consolidated spending		73,027
Less our share of unconsolidated spending		(2,998	)

Total capital expenditures per consolidated statement of cash flows	$	512,564

Included in the above spending for CI, casualties and redevelopment, was approximately $54.8 million of our share of capitalized site payroll and indirect costs related to these activities for the year ended December 31, 2006.

We funded all of the above capital expenditures with cash provided by operating activities, working capital, property sales and borrowings under the revolving credit facility.

Financing Activities

For the year ended December 31, 2006, net cash used in financing activities of $697.2 million primarily related to repayments of property loans, redemptions of Class Q Cumulative Preferred Stock, Class R Cumulative Preferred Stock and Class X Cumulative Convertible Preferred Stock, Common Stock and preferred stock dividends, distributions to minority interests, and repurchases of Common Stock. Proceeds from property loans, issuance of preferred stock and stock option exercises partially offset the cash outflow.

Mortgage Debt

At December 31, 2006 and 2005, we had $6.3 billion and $5.7 billion, respectively, in consolidated mortgage debt outstanding, which included zero and $384.3 million, respectively, of mortgage debt classified within liabilities related to assets held for sale. During the year ended December 31, 2006, we refinanced or closed mortgage loans on 66 consolidated properties generating $1,224.6 million of proceeds from borrowings with a weighted average interest rate of 5.66%. Our share of the net proceeds after repayment of existing debt, payment of transaction costs and distributions to limited partners, was $589.4 million. We used these total net proceeds for capital expenditures and other corporate purposes. We intend to continue to refinance mortgage debt to generate proceeds in amounts exceeding our scheduled amortizations and maturities.

Revolving Credit Facility and Term Loans

We have an Amended and Restated Senior Secured Credit Agreement with a syndicate of financial institutions, which we refer to as the Credit Agreement. On March 22, 2006, we amended various terms in our Credit Agreement, including the ability to request an increase in the aggregate commitments (which may be revolving or term loan commitments) by an amount not to exceed $150 million; a reduction in the interest rate spread applicable to revolving loans to LIBOR plus a margin that can range from 1.125% to 1.75%; a reduction in the interest rate spread applicable to letters of credit; a reduction in the spread applicable to term loans to LIBOR plus 1.5%; and an extension of the maturity dates from November 2, 2007, to May 1, 2009, for the revolver and from November 2, 2009, to March 22, 2011, for the term loans.

The aggregate amount of commitments and loans under the Credit Agreement is $850.0 million, comprised of $400.0 million in term loans and $450.0 million of revolving loan commitments. At December 31, 2006, the term loans had an outstanding principal balance of $400.0 million and an interest rate of 6.91%. At December 31, 2006, the revolving loans had an outstanding principal balance of $140.0 million and a weighted average interest rate of 6.725% (based on various weighted average LIBOR borrowings outstanding with various maturities). The amount available under the revolving credit facility at December 31, 2006, was $277.3 million (after giving effect to $32.7 million outstanding for undrawn letters of credit issued under the revolving credit facility). The proceeds of revolving loans are generally permitted to be used to fund working capital and for other corporate purposes. For more information, see Note 7 of the consolidated financial statements in Item 8.

Equity Transactions

During the year ended December 31, 2006, we redeemed all outstanding shares of our 10.0% Class R Cumulative Preferred Stock for $173.5 million, all outstanding shares of our 10.1% Class Q Cumulative Preferred Stock for $63.3 million, and all outstanding shares of our 8.5% Class X Cumulative Convertible Preferred Stock for $50.0 million. On June 29, 2006, we sold 200 shares of Series A Community Reinvestment Act Perpetual Preferred Stock, $0.01 par value per share, which we refer to as the CRA Preferred Stock, with a liquidation preference of $500,000 per share, for net proceeds of approximately $97.5 million. SeePreferred Stockin Note 11 to the consolidated financial statements in Item 8 for additional information about our preferred stock transactions during 2006.

Under our shelf registration statement, as of December 31, 2006 we had available for issuance approximately $877 million of debt and equity securities and the Aimco Operating Partnership had available for issuance $500 million of debt securities.

Our Board of Directors has, from time to time, authorized us to repurchase shares of our outstanding capital stock. During the year ended December 31, 2006, we repurchased approximately 2.3 million shares of Common Stock for cash totaling approximately $120.3 million. Currently, we are authorized to repurchase up to an additional 5.7 million shares of our Common Stock under an authorization that has no expiration date. These repurchases may be made from time to time in the open market or in privately negotiated transactions.

Contractual Obligations

This table summarizes information contained elsewhere in this Annual Report regarding payments due under contractual obligations and commitments as of December 31, 2006 (amounts in thousands):


			Less than		1-3		3-5		More than
	Total		One Year		Years		Years		5 Years

Scheduled long-term debt maturities	$	6,332,753	$	449,848	$	1,077,408	$	847,195	$	3,958,302
Secured credit facility and term loans		540,000		—		140,000		400,000		—
Redevelopment and other construction commitments		146,655		106,319		40,336		—		—
Leases for space occupied		39,804		8,270		13,763		9,126		8,645
Other obligations(1)		16,900		16,900		—		—		—

Total	$	7,076,112	$	581,337	$	1,271,507	$	1,256,321	$	3,966,947


(1)		Includes a commitment to fund $14.4 million in second mortgage loans on certain properties in West Harlem, New York City and the final $2.5 million development fee payment to Casden Properties, LLC as a retainer on account for redevelopment services.

In addition, we may enter into commitments to purchase goods and services in connection with the operations of our properties. Those commitments generally have terms of one year or less and reflect expenditure levels comparable to our historical expenditures.

Future Capital Needs

In addition to the items set forth in “Contractual Obligations” above, we expect to fund any future acquisitions, additional redevelopment projects and capital improvements principally with proceeds from property sales (including tax-free exchange proceeds), short-term borrowings, debt and equity financings and operating cash flows.

In 2007, we plan to invest between $275 and $325 million in conventional redevelopment projects that will impact approximately 79 properties with over 30,000 units. Additionally, in 2007 redevelopment expenditures on affordable properties will be approximately $36 million, predominantly funded by third-party tax credit equity, impacting more than 15 properties with more than 1,800 units.

Off-Balance Sheet Arrangements

We own general and limited partner interests in unconsolidated real estate partnerships, in which our total ownership interests range typically from less than 1% up to 50%. However, based on the provisions of the relevant partnership agreements, we are not deemed to have control of these partnerships sufficient to require or permit consolidation for accounting purposes (see Note 2 of the consolidated financial statements in Item 8). There are no lines of credit, side agreements, or any other derivative financial instruments related to or between our unconsolidated real estate partnerships and us and no material exposure to financial guarantees. Accordingly, our maximum risk of loss related to these unconsolidated real estate partnerships is limited to the aggregate carrying amount of our investment in the unconsolidated real estate partnerships and any outstanding notes receivable as reported in our consolidated financial statements. See Note 4 of the consolidated financial statements in Item 8 for additional information about our investments in unconsolidated real estate partnerships.


Item 7A.	*Quantitative and Qualitative Disclosures About Market Risk*

Our primary market risk exposure relates to changes in interest rates. We are not subject to any foreign currency exchange rate risk or commodity price risk, or any other material market rate or price risks. We use predominantly long-term, fixed-rate non-recourse mortgage debt in order to avoid the refunding and repricing risks of short-term borrowings. We use short-term debt financing and working capital primarily to fund short-term uses

and acquisitions and generally expect to refinance such borrowings with cash from operating activities, property sales proceeds, long-term debt or equity financings.

We had $1,663.4 million of floating rate debt outstanding at December 31, 2006. Of the total floating rate debt, the major components were floating rate tax-exempt bond financing ($640.6 million), floating rate secured notes ($482.8 million), revolving loans ($140.0 million), and term loans ($400.0 million). Historically, changes in tax-exempt interest rates have been at a ratio of less than 1:1 with changes in taxable interest rates. Floating rate tax-exempt bond financing is benchmarked against the BMA Index, which since 1981 has averaged 68% of the30-day LIBOR rate. If this relationship continues, an increase in30-day LIBOR of 1.0% (0.68% in tax-exempt interest rates) would result in our income before minority interests and cash flows being reduced by $14.6 million on an annual basis. This would be offset by variable rate interest income earned on certain assets, including cash and cash equivalents and notes receivable, as well as interest that is capitalized on a portion of this variable rate debt incurred in connection with our redevelopment activities. Considering these offsets, the same increase in30-day LIBOR would result in our income before minority interests and cash flows being reduced by $4.4 million on an annual basis. Comparatively, if30-day LIBOR had increased by 1% in 2005, our income before minority interests and cash flows, after considering such offsets, would have been reduced by $8.5 million on an annual basis. The potential reduction of income before minority interests was lower in 2006 as compared to 2005 primarily due to lower floating rate balances resulting from the sale of several properties that were encumbered by variable rate mortgages and the refinancing of existing variable rate mortgages.

We believe that the fair value of our floating rate secured tax-exempt bond debt and floating rate secured long-term debt as of December 31, 2006, approximate their carrying values. The fair value for our fixed-rate debt agreements was estimated based on the market rate for debt with the same or similar terms. The combined carrying amount of our fixed-rate secured tax-exempt bonds and fixed-rate secured notes payable at December 31, 2006 was $5.1 billion compared to the estimated fair value of $5.3 billion (see Note 2 to the consolidated financial statements in Item 8). If market rates for our fixed-rate debt were higher by 1%, the estimated fair value of our fixed-rate debt would have decreased from $5.3 billion to $5.0 billion. If market rates for our fixed-rate debt were lower by 1%, the estimated fair value of our fixed-rate debt would have increased from $5.3 billion to $5.6 billion.


Item 8.	*Financial Statements and Supplementary Data*

The independent registered public accounting firm’s report, consolidated financial statements and schedule listed in the accompanying index are filed as part of this report and incorporated herein by this reference. See “Index to Financial Statements” onpage F-1 of this Annual Report.


Item 9.	*Changes in and Disagreements With Accountants on Accounting and Financial Disclosure*

None.


Item 9A.	*Controls and Procedures*

Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined inRules 13a-15(e) and15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, our chief executive officer and chief financial officer have concluded that, as of the end of such period, our disclosure controls and procedures are adequate.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined inRule 13a-15(f) and15d-15(f) under the Exchange Act as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our Board of Directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:


	•	pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of assets;

	•	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

	•	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2006. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) inInternal Control-Integrated Framework.

Based on their assessment, management concluded that, as of December 31, 2006, our internal control over financial reporting is effective.

Our independent registered public accounting firm has issued an audit report on management’s assessment of our internal control over financial reporting.

Changes in Internal Control over Financial Reporting

There have been no significant changes in our internal control over financial reporting (as defined inRules 13a-15(f) and15d-15(f)) under the Exchange Act) during fourth quarter 2006 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Report of Independent Registered Public Accounting Firm

Stockholders and Board of Directors of Apartment Investment and Management Company

We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control Over Financial Reporting, that Apartment Investment and Management Company (the “Company”) maintained effective internal control over financial reporting as of December 31, 2006, based on criteria established inInternal Control — Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that Apartment Investment and Management Company maintained effective internal control over financial reporting as of December 31, 2006, is fairly stated, in all material respects, based on the COSO criteria. Also, in our opinion, Apartment Investment and Management Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2006, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Apartment Investment and Management Company as of December 31, 2006 and 2005, and the related consolidated statements of income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2006, and our report dated February 26, 2007 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Denver, Colorado

February 26, 2007


Item 9B.	*Other Information*

Fourth Amended and Restated Agreement of Limited Partnership of the Aimco Operating Partnership

On February 28, 2007, AIMCO-GP, Inc., the general partner of the Aimco Operating Partnership amended and restated the Third Amended and Restated Agreement of Limited Partnership, as amended to date. AIMCO-GP, Inc. determined that the Fourth Amended and Restated Agreement of Limited Partnership includes only such amendments as are permitted to be effected by AIMCO-GP, Inc. as the general partner pursuant to the terms of the partnership agreement.

Amendment to Purchase and Sale Agreement for Flamingo South Beach Property

On February 17, 2006, we closed the sale of a portion of the Flamingo South Beach property known as the South Tower. The South Tower sale price was $163.5 million and included 562 residential units and our rights to the property’s marina. Additionally, the buyer paid $5 million (which is non-refundable) for the option to purchase the614-unit North Tower for $169 million between September 1, 2006, and February 28, 2007 (subject to the right to extend for up to six months subject to certain conditions), and the option to purchase the513-unit Central Tower, along with the remainder of improvements on the property, for $267.5 million between December 1, 2007, and May 31, 2008 (subject to the right to extend for up to four months subject to certain conditions and provided that the buyer has previously purchased the North Tower). The agreement also granted us a $19.8 million profit participation interest in the buyer’s proposed condominium conversion after certain development fees and certain returns on the buyer’s equity have been achieved, plus twenty percent of the buyer’s net profits thereafter. On February 23, 2007, we amended the related purchase and sale agreement. The amendment gives the buyer the right to commence a marketing and sales program at the North Tower with respect to its planned condominium conversion; extends the option period for the North Tower to October 31, 2007, and extends the outside closing date to December 31, 2007. In order to extend the option period to October 31, 2007, the buyer must deliver notice by May 1, 2007, along with a $1 million non-refundable deposit. The parties entered into a revenue guarantee with respect to the North Tower whereby the buyer will pay any shortfall between actual revenue and budgeted revenue. In addition, the amendment reduced the profit participation interest to $14.8 million and, in exchange for that reduction and the buyer’s right to commence marketing and extend the closing date, the buyer has agreed to pay amounts totaling $5.0 million at the earlier of closing or at the time the buyer fails to exercise the purchase option on the North Tower.

PART III


Item 10.	*Directors, Executive Officers and Corporate Governance*

The information required by this item is presented under the captions “Board of Directors and Officers,” “Corporate Governance Matters — Code of Ethics,” “Other Matters — Section 16(a) Beneficial Ownership Reporting Compliance,” “Corporate Governance Matters — Nominating and Corporate Governance Committee,” “Corporate Governance Matters — Audit Committee,” and “Corporate Governance Matters — Audit Committee Financial Expert” in the proxy statement for our 2007 annual meeting of stockholders and is incorporated herein by reference.


Item 11.	*Executive Compensation*

The information required by this item is presented under the captions “Compensation Discussion and Analysis,” “Compensation and Human Resources Committee Report to Stockholders,” “Summary Compensation Table,” “Grants of Plan-Based Awards,” “Outstanding Equity Awards at Fiscal Year End,” “Option Exercises and Stock Vested,” “Potential Payments Upon Termination or Change in Control,” “Corporate Governance Matters — Director Compensation,” and “Corporate Governance Matters — Compensation and Human Resources Committee Interlocks and Insider Participation,” in the proxy statement for our 2007 annual meeting of stockholders and is incorporated herein by reference.


Item 12.	*Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters*

The information required by this item is presented under the captions “Security Ownership of Certain Beneficial Owners and Management” and “Securities Authorized for Issuance Under Equity Compensation Plans” in the proxy statement for our 2007 annual meeting of stockholders and is incorporated herein by reference.


Item 13.	*Certain Relationships and Related Transactions, and Director Independence*

The information required by this item is presented under the caption “Certain Relationships and Related Transactions” and “Corporate Governance Matters — Independence of Directors” in the proxy statement for our 2007 annual meeting of stockholders and is incorporated herein by reference.


Item 14.	*Principal Accountant Fees and Services*

The information required by this item is presented under the caption “Principal Accountant Fees and Services” in the proxy statement for our 2007 annual meeting of stockholders and is incorporated herein by reference.

PART IV


Item 15.	*Exhibits and Financial Statement Schedules*

(a)(1) The financial statements listed in the Index to Financial Statements onPage F-1 of this report are filed as part of this report and incorporated herein by reference.

(a)(2) The financial statement schedule listed in the Index to Financial Statements onPage F-1 of this report is filed as part of this report and incorporated herein by reference.

(a)(3) The Exhibit Index is incorporated herein by reference.

INDEX TO EXHIBITS(1)(2)


Exhibit No.			Description

	2	.1	Agreement and Plan of Merger, dated as of December 3, 2001, by and among Apartment Investment and Management Company, Casden Properties, Inc. and XYZ Holdings LLC (Exhibit 2.1 to Aimco’s Current Report onForm 8-K, filed December 6, 2001, is incorporated herein by this reference)
	3	.1	Charter (Exhibit 3.1 to Aimco’s Quarterly Report onForm 10-Q for the quarterly period ended June 30, 2006, is incorporated herein by this reference)
	3	.2	Bylaws (Exhibit 3.2 to Aimco’s Quarterly Report onForm 10-Q for the quarterly period ended March 31, 2001, is incorporated herein by this reference)
	10	.1	Fourth Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 29, 1994 as amended and restated as of February 28, 2007
	10	.2	Amended and Restated Secured Credit Agreement, dated as of November 2, 2004, by and among Aimco, AIMCO Properties, L.P., AIMCO/Bethesda Holdings, Inc., and NHP Management Company as the borrowers and Bank of America, N.A., Keybank National Association, and the Lenders listed therein (Exhibit 4.1 to Aimco’s Quarterly Report onForm 10-Q for the quarterly period ended September 30, 2004, is incorporated herein by this reference)
	10	.3	First Amendment to Amended and Restated Secured Credit Agreement, dated as of June 16, 2005, by and among Aimco, AIMCO Properties, L.P., AIMCO/Bethesda Holdings, Inc., and NHP Management Company as the borrowers and Bank of America, N.A., Keybank National Association, and the Lenders listed therein (Exhibit 10.1 to Aimco’s Current Report onForm 8-K, dated June 16, 2005, is incorporated herein by this reference)
	10	.4	Second Amendment to Amended and Restated Senior Secured Credit Agreement, dated as of March 22, 2006, by and among Aimco, AIMCO Properties, L.P., and AIMCO/Bethesda Holdings, Inc., as the borrowers, and Bank of America, N.A., Keybank National Association, and the lenders listed therein (Exhibit 10.1 to Aimco’s Current Report onForm 10-K, dated March 22, 2006, is incorporated herein by this reference)
	10	.5	Master Indemnification Agreement, dated December 3, 2001, by and among Apartment Investment and Management Company, AIMCO Properties, L.P., XYZ Holdings LLC, and the other parties signatory thereto (Exhibit 2.3 to Aimco’s Current Report onForm 8-K, filed December 6, 2001, is incorporated herein by this reference)
	10	.6	Tax Indemnification and Contest Agreement, dated December 3, 2001, by and among Apartment Investment and Management Company, National Partnership Investments, Corp., and XYZ Holdings LLC and the other parties signatory thereto (Exhibit 2.4 to Aimco’s Current Report onForm 8-K, filed December 6, 2001, is incorporated herein by this reference)
	10	.7	Limited Liability Company Agreement of AIMCO JV Portfolio #1, LLC dated as of December 30, 2003 by and among AIMCO BRE I, LLC, AIMCO BRE II, LLC and SRV-AJVP#1, LLC (Exhibit 10.54 to Aimco’s Annual Report onForm 10-K for the year ended December 31, 2003, is incorporated herein by this reference)


Exhibit No.			Description

	10	.8	Employment Contract executed on July 29, 1994 by and between AIMCO Properties, L.P. and Terry Considine (Exhibit 10.44C to Aimco’s Annual Report onForm 10-K for the year ended December 31, 1994, is incorporated herein by this reference)*
	10	.9	Apartment Investment and Management Company 1997 Stock Award and Incentive Plan (October 1999) (Exhibit 10.26 to Aimco’s Annual Report onForm 10-K for the year ended December 31, 1999, is incorporated herein by this reference)*
	10	.10	Form of Restricted Stock Agreement (1997 Stock Award and Incentive Plan) (Exhibit 10.11 to Aimco’s Quarterly Report onForm 10-Q for the quarterly period ended September 30, 1997, is incorporated herein by this reference)*
	10	.11	Form of Incentive Stock Option Agreement (1997 Stock Award and Incentive Plan) (Exhibit 10.42 to Aimco’s Annual Report onForm 10-K for the year ended December 31, 1998, is incorporated herein by this reference)*
	21	.1	List of Subsidiaries
	23	.1	Consent of Independent Registered Public Accounting Firm
	31	.1	Certification of Chief Executive Officer pursuant to Securities Exchange ActRules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	31	.2	Certification of Chief Financial Officer pursuant to Securities Exchange ActRules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	32	.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	32	.2	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	99	.1	Agreement re: disclosure of long-term debt instruments


(1)		Schedule and supplemental materials to the exhibits have been omitted but will be provided to the Securities and Exchange Commission upon request.

(2)		The file reference number for all exhibits is001-13232, and all such exhibits remain available pursuant to the Records Control Schedule of the Securities and Exchange Commission.

*		Management contract or compensatory plan or arrangement

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 1st day of March 2007.

Apartment Investment and
Management Company


		/s/ Terry Considine

Terry Considine

Chairman of the Board,

Chief Executive Officer and President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


Signature	Title	Date

/s/ Terry Considine Terry Considine	Chairman of the Board, Chief Executive Officer and President (principal executive officer)	March 1, 2007

/s/ Thomas M. Herzog Thomas M. Herzog	Executive Vice President and Chief Financial Officer (principal financial officer)	March 1, 2007

/s/ Scott W. Fordham Scott W. Fordham	Senior Vice President and Chief Accounting Officer (principal accounting officer)	March 1, 2007

/s/ James N. Bailey James N. Bailey	Director	March 1, 2007

/s/ Richard S. Ellwood Richard S. Ellwood	Director	March 1, 2007

/s/ J. Landis Martin J. Landis Martin	Director	March 1, 2007

/s/ Thomas L. Rhodes Thomas L. Rhodes	Director	March 1, 2007

/s/ Michael A. Stein Michael A. Stein	Director	March 1, 2007

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

INDEX TO FINANCIAL STATEMENTS


	Page

Financial Statements:
Report of Independent Registered Public Accounting Firm		F-2
Consolidated Balance Sheets as of December 31, 2006 and 2005		F-3
Consolidated Statements of Income for the Years Ended December 31, 2006, 2005 and 2004		F-4
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2006, 2005 and 2004		F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 2006, 2005 and 2004		F-6
Notes to Consolidated Financial Statements		F-8
Financial Statement Schedule:
Schedule III — Real Estate and Accumulated Depreciation		F-40
All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Stockholders and Board of Directors Apartment Investment and Management Company

We have audited the accompanying consolidated balance sheets of Apartment Investment and Management Company as of December 31, 2006 and 2005, and the related consolidated statements of income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2006. Our audits also included the financial statement schedule listed in the accompanying Index to Financial Statements. These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Apartment Investment and Management Company at December 31, 2006 and 2005, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2006, in conformity with United States generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects the information set forth therein.

As discussed in Note 2 to the consolidated financial statements, in 2006 the Company adopted the provisions of Emerging Issues Task Force Issue04-5,Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Apartment Investment and Management Company’s internal control over financial reporting as of December 31, 2006, based on criteria established inInternal Control — Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 26, 2007 expressed an unqualified opinion thereon.

/s/ ERNST & YOUNG LLP

Denver, Colorado

February 26, 2007

F-2

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONSOLIDATED BALANCE SHEETS
As of December 31, 2006 and 2005
(In thousands, except share data)


	2006			2005

ASSETS
Real estate:
Buildings and improvements	$	9,561,537		$	8,002,413
Land		2,420,948			2,196,111

Total real estate		11,982,485			10,198,524
Less accumulated depreciation		(2,901,267	)		(2,009,286	)

Net real estate		9,081,218			8,189,238
Cash and cash equivalents		229,824			161,730
Restricted cash		347,506			283,684
Accounts receivable		85,772			59,889
Accounts receivable from affiliates		20,763			43,070
Deferred financing costs		73,749			63,738
Notes receivable from unconsolidated real estate partnerships		40,641			177,200
Notes receivable from non-affiliates		139,352			23,760
Investment in unconsolidated real estate partnerships		39,000			173,437
Other assets		231,950			211,245
Deferred income tax assets, net		—			9,835
Assets held for sale		—			622,334

Total assets	$	10,289,775		$	10,019,160

LIABILITIES AND STOCKHOLDERS’ EQUITY
Property tax-exempt bond financing	$	936,082		$	995,897
Property loans payable		5,329,011			4,320,688
Term loans		400,000			400,000
Credit facility		140,000			217,000
Other borrowings		67,660			88,272

Total indebtedness		6,872,753			6,021,857

Accounts payable		54,972			34,381
Accrued liabilities and other		410,071			335,363
Deferred income		165,684			46,466
Security deposits		44,428			36,767
Deferred income tax liabilities, net		4,379			—
Liabilities related to assets held for sale		—			392,815

Total liabilities		7,552,287			6,867,649

Minority interest in consolidated real estate partnerships		212,149			217,679
Minority interest in Aimco Operating Partnership		185,447			217,729
Stockholders’ equity:
Preferred Stock, perpetual		723,500			860,250
Preferred Stock, convertible		100,000			150,000
Class A Common Stock, $.01 par value, 426,157,976 shares authorized, 96,820,252 and 95,732,200 shares issued and outstanding, at December 31, 2006 and 2005, respectively		968			957
Additional paid-in capital		3,095,430			3,081,706
Notes due on common stock purchases		(4,714	)		(25,911	)
Distributions in excess of earnings		(1,575,292	)		(1,350,899	)

Total stockholders’ equity		2,339,892			2,716,103

Total liabilities and stockholders’ equity	$	10,289,775		$	10,019,160

See notes to consolidated financial statements.

F-3

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONSOLIDATED STATEMENTS OF INCOME
For the Years Ended December 31, 2006, 2005 and 2004
(In thousands, except per share data)


	2006			2005			2004

REVENUES:
Rental and other property revenues	$	1,629,988		$	1,346,587		$	1,211,865
Property management revenues, primarily from affiliates		12,312			24,528			32,461
Activity fees and asset management revenues		48,694			37,349			34,879

Total revenues		1,690,994			1,408,464			1,279,205

OPERATING EXPENSES:
Property operating expenses		758,128			633,984			567,937
Property management expenses		4,912			7,361			9,789
Activity and asset management expenses		9,521			10,628			11,879
Depreciation and amortization		470,597			376,231			315,451
General and administrative expenses		101,702			92,826			77,424
Other expenses (income), net		8,981			8,046			12,490

Total operating expenses		1,353,841			1,129,076			994,970

Operating income		337,153			279,388			284,235
Interest income		32,315			31,001			32,101
Recovery of (provision for) losses on notes receivable		(2,785	)		1,365			1,765
Interest expense		(408,075	)		(343,335	)		(318,006	)
Deficit distributions to minority partners		(21,004	)		(11,615	)		(17,374	)
Equity in losses of unconsolidated real estate partnerships		(2,070	)		(3,139	)		(1,768	)
Real estate impairment (losses) recoveries, net		813			(6,120	)		(3,426	)
Gain on dispositions of unconsolidated real estate and other		34,567			18,958			69,294

Income (loss) before minority interests, discontinued operations and cumulative effect of change in accounting principle		(29,086	)		(33,497	)		46,821
Minority interests:
Minority interest in consolidated real estate partnerships		(19,628	)		5,065			14,630
Minority interest in Aimco Operating Partnership, preferred		(7,153	)		(7,226	)		(7,858	)
Minority interest in Aimco Operating Partnership, common		13,193			12,535			4,192

Total minority interests		(13,588	)		10,374			10,964

Income (loss) from continuing operations		(42,674	)		(23,123	)		57,785
Income from discontinued operations, net		219,461			94,105			209,669

Income before cumulative effect of change in accounting principle		176,787			70,982			267,454
Cumulative effect of change in accounting principle		—			—			(3,957	)

Net income		176,787			70,982			263,497
Net income attributable to preferred stockholders		81,132			87,948			88,804

Net income (loss) attributable to common stockholders	$	95,655		$	(16,966	)	$	174,693

Earnings (loss) per common share — basic:
Loss from continuing operations (net of preferred dividends)	$	(1.29	)	$	(1.18	)	$	(0.33	)
Income from discontinued operations		2.29			1.00			2.25
Cumulative effect of change in accounting principle		—			—			(0.04	)

Net income (loss) attributable to common stockholders	$	1.00		$	(0.18	)	$	1.88

Earnings (loss) per common share — diluted:
Loss from continuing operations (net of preferred dividends)	$	(1.29	)	$	(1.18	)	$	(0.33	)
Income from discontinued operations		2.29			1.00			2.25
Cumulative effect of change in accounting principle		—			—			(0.04	)

Net income (loss) attributable to common stockholders	$	1.00		$	(0.18	)	$	1.88

Weighted average common shares outstanding		95,758			93,894			93,118

Weighted average common shares and equivalents outstanding		95,758			93,894			93,118

Dividends declared per common share	$	2.40		$	3.00		$	2.40

See notes to consolidated financial statements.

F-4

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
For the Years Ended December 31, 2006, 2005 and 2004
(In thousands)


																	Notes
								Class A									Due on
		Preferred Stock						Common Stock						Additional			Common			Distributions
		Shares						Shares						Paid-in			Stock			in Excess of
		Issued			Amount			Issued			Amount			Capital			Purchases			Earnings			Total

Balances at December 31, 2003			32,125		$	855,242			93,887		$	939		$	3,042,540		$	(40,046	)	$	(998,018	)	$	2,860,657
Issuance of Preferred Stock			18,805			372,500			—			—			(12,828	)		—			—			359,672
Redemption of Preferred Stock			(11,355	)		(186,242	)		—			—			3,638			—			(3,489	)		(186,093	)
Conversion of Aimco Operating Partnership units to Common Stock			—			—			743			7			23,574			—			—			23,581
Conversion of mandatorily redeemable convertible preferred stock to Common Stock			—			—			2			—			100			—			—			100
Repurchases of Common Stock			—			—			(397	)		(4	)		(12,594	)		—			—			(12,598	)
Repayment of notes receivable from officers			—			—			—			—			—			4,639			—			4,639
Casden acquisition contingent consideration adjustment			—			—			—			—			(4,848	)		—			—			(4,848	)
Officer and employee stock awards and purchases, net			—			—			550			6			2,363			(1,318	)		—			1,051
Stock options exercised			—			—			69			1			1,882			—			—			1,883
Amortization of stock option and restricted stock compensation cost			—			—			—			—			6,506			—			—			6,506
Net income			—			—			—			—			—			—			263,497			263,497
Common Stock dividends			—			—			—			—			—			—			(225,903	)		(225,903	)
Preferred Stock dividends			—			—			—			—			—			—			(83,984	)		(83,984	)

Balances at December 31, 2004			39,575			1,041,500			94,854			949			3,050,333			(36,725	)		(1,047,897	)		3,008,160
Redemption of Preferred Stock			(1,250	)		(31,250	)		—			—			1,123			—			(1,123	)		(31,250	)
Conversion of Aimco Operating Partnership units to Common Stock			—			—			426			4			16,890			—			—			16,894
Preferred Stock issuance costs			—			—			—			—			(409	)		—			—			(409	)
Repayment of notes receivable from officers			—			—			—			—			—			12,255			—			12,255
Officer and employee stock awards and purchases, net			—			—			379			4			2,219			(1,441	)		—			782
Stock options exercised			—			—			65			—			2,315			—			—			2,315
Purchase of Oxford warrants			—			—			—			—			(1,050	)		—			—			(1,050	)
Common Stock issued as consideration for acquisition of interest in real estate			—			—			8			—			310			—			—			310
Amortization of stock option and restricted stock compensation cost	��		—			—			—			—			9,975			—			—			9,975
Net income			—			—			—			—			—			—			70,982			70,982
Common Stock dividends			—			—			—			—			—			—			(284,254	)		(284,254	)
Preferred Stock dividends			—			—			—			—			—			—			(88,607	)		(88,607	)

Balances at December 31, 2005			38,325			1,010,250			95,732			957			3,081,706			(25,911	)		(1,350,899	)		2,716,103
Cumulative effect of change in accounting principle — adoption of EITF04-5			—			—			—			—			—			—			(75,012	)		(75,012	)
Issuance of 200 shares of CRA Preferred Stock			—			100,000			—			—			(2,509	)		—			—			97,491
Redemption of Preferred Stock			(11,470	)		(286,750	)		—			—			6,848			—			(6,848	)		(286,750	)
Conversion of Aimco Operating Partnership units to Common Stock			—			—			99			1			4,560			—			—			4,561
Repurchases of Common Stock			—			—			(2,301	)		(23	)		(120,235	)		—			—			(120,258	)
Repayment of notes receivable from officers			—			—			—			—			—			21,844			—			21,844
Officer and employee stock awards and purchases, net			—			—			456			5			678			(647	)		—			36
Stock options exercised			—			—			2,826			28			107,575			—			—			107,603
Excess income tax benefits related to stock-based compensation and other			—			—			—			—			454			—			—			454
Common Stock issued as consideration for acquisition of interest in real estate			—			—			8			—			479			—			—			479
Amortization of stock option and restricted stock compensation cost			—			—			—			—			15,874			—			—			15,874
Net income			—			—			—			—			—			—			176,787			176,787
Common Stock dividends			—			—			—			—			—			—			(232,185	)		(232,185	)
Preferred Stock dividends			—			—			—			—			—			—			(87,135	)		(87,135	)

Balances at December 31, 2006			26,855		$	823,500			96,820		$	968		$	3,095,430		$	(4,714	)	$	(1,575,292	)	$	2,339,892

See notes to consolidated financial statements.

F-5

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2006, 2005 and 2004
(In thousands)


	2006			2005			2004

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	176,787		$	70,982		$	263,497

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		470,597			376,231			315,451
Deficit distributions to minority partners		21,004			11,615			17,374
Equity in losses of unconsolidated real estate partnerships		2,070			3,139			1,768
Gain on dispositions of unconsolidated real estate and other		(34,567	)		(18,958	)		(69,294	)
Real estate impairment losses (recoveries), net		(813	)		6,120			3,426
Deferred income tax provision (benefit)		14,895			(19,146	)		706
Cumulative effect of change in accounting principle		—			—			3,957
Minority interest in Aimco Operating Partnership		(6,040	)		(5,309	)		3,666
Minority interest in consolidated real estate partnerships		19,628			(5,065	)		(14,630	)
Stock-based compensation expense		15,874			9,975			6,506
Amortization of deferred loan costs and other		18,471			1,700			5,484
Discontinued operations:
Depreciation and amortization		20,101			58,634			67,277
Gain on dispositions of real estate, net of minority partners’ interest		(260,206	)		(102,972	)		(249,354	)
Other adjustments to income from discontinued operations		4,267			(3,139	)		26,959
Changes in operating assets and operating liabilities:
Accounts receivable		(3,178	)		11,450			(2,067	)
Other assets		45,332			17,542			(11,406	)
Accounts payable, accrued liabilities and other		28,057			(57,250	)		(3,797	)

Total adjustments		355,492			284,567			102,026

Net cash provided by operating activities		532,279			355,549			365,523

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of real estate		(153,426	)		(243,996	)		(280,002	)
Capital expenditures		(512,564	)		(443,882	)		(301,937	)
Proceeds from dispositions of real estate		958,604			718,434			971,568
Change in funds held in escrow from tax-free exchanges		(19,021	)		(4,571	)		5,489
Cash from newly consolidated properties		23,269			4,186			14,765
Distributions and sales proceeds from investments in real estate partnerships		45,662			57,706			72,160
Purchases of partnership interests and other assets		(37,570	)		(125,777	)		(132,711	)
Originations of notes receivable		(94,640	)		(38,336	)		(76,157	)
Proceeds from repayment of notes receivable		9,604			28,556			79,599
Other investing activities		13,122			(2,281	)		(15,861	)

Net cash provided by (used in) investing activities		233,040			(49,961	)		336,913

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from property loans		1,185,670			721,414			501,611
Principal repayments on property loans		(1,004,142	)		(735,816	)		(728,084	)
Proceeds from tax-exempt bond financing		75,568			—			69,471
Principal repayments on tax-exempt bond financing		(229,287	)		(78,648	)		(188,577	)
Net borrowings (paydowns) on term loans and revolving credit facility		(77,000	)		248,300			(66,687	)
Proceeds (paydowns) on other borrowings		(22,838	)		—			38,871
Redemption of mandatorily redeemable preferred securities		—			(15,019	)		(98,875	)
Proceeds from issuance of preferred stock, net		97,491			—			359,672
Redemptions of preferred stock		(286,750	)		(31,250	)		(186,093	)
Repurchase of Class A Common Stock		(109,937	)		—			(12,597	)
Proceeds from Class A Common Stock option exercises		107,603			2,315			1,883
Principal repayments received on notes due on Class A Common Stock purchases		21,844			12,255			4,639
Payment of Class A Common Stock dividends		(231,697	)		(226,815	)		(225,903	)
Payment of preferred stock dividends		(74,700	)		(86,582	)		(83,984	)
Contributions from minority interest		458			34,990			44,292
Payment of distributions to minority interest		(130,585	)		(78,739	)		(119,056	)
Other financing activities		(18,923	)		(15,606	)		(22,108	)

Net cash used in financing activities		(697,225	)		(249,201	)		(711,525	)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		68,094			56,387			(9,089	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		161,730			105,343			114,432

CASH AND CASH EQUIVALENTS AT END OF YEAR	$	229,824		$	161,730		$	105,343

See notes to consolidated financial statements.

F-6

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2006, 2005 and 2004
(In thousands)


	2006			2005			2004

SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid	$	438,946		$	399,511		$	372,703
Cash paid for income taxes		9,807			4,785			—
Non-cash transactions associated with the acquisition of real estate and interests in unconsolidated real estate partnerships:
Secured debt assumed in connection with purchase of real estate		47,112			38,740			83,114
Issuance of OP Units for interests in unconsolidated real estate partnerships and acquisitions of real estate		13			125			2,609
Non-cash transactions associated with consolidation of real estate partnerships:
Real estate, net		675,621			201,492			231,932
Investments in and notes receivable primarily from affiliated entities		(219,691	)		(72,341	)		(40,178	)
Restricted cash and other assets		94,380			16,942			47,744
Secured debt		503,342			112,521			204,243
Accounts payable, accrued and other liabilities		41,580			17,326			21,394
Minority interest in consolidated real estate partnerships		57,157			6,834			29,439
Other non-cash transactions:
Conversion of common OP Units for Class A Common Stock		4,362			16,853			23,322
Conversion of preferred OP Units for Class A Common Stock		199			41			259
Origination of notes receivable from officers for Class A Common Stock purchases, net of cancellations		647			1,441			1,318
Exchanges of preferred stock		—			—			150,000
Tenders payable for purchase of limited partner interests		—			950			2,799

See notes to consolidated financial statements.

F-7

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2006

Note 1 — Organization

As of December 31, 2006, we:


	•	owned an equity interest in and consolidated 162,432 units in 703 properties (which we refer to as “consolidated”), of which 161,584 units were also managed by us;

	•	owned an equity interest in and did not consolidate 11,791 units in 102 properties (which we refer to as “unconsolidated”), of which 5,638 units were also managed by us; and

	•	provided services or managed, for third-party owners, 42,190 units in 451 properties, primarily pursuant to long-term agreements (including 38,617 units in 410 properties for which we provide asset management services only, and not also property management services), although in certain cases we may indirectly own generally less than one percent of the operations of such properties through a partnership syndication or other fund.

Through our wholly-owned subsidiaries, AIMCO-GP, Inc. and AIMCO-LP, Inc., we own a majority of the ownership interests in AIMCO Properties, L.P., which we refer to as the Aimco Operating Partnership. As of December 31, 2006, we held approximately a 90% interest in the common partnership units and equivalents of the Aimco Operating Partnership. We conduct substantially all of our business and own substantially all of our assets through the Aimco Operating Partnership. Interests in the Aimco Operating Partnership that are held by limited partners other than Aimco are referred to as “OP Units.” OP Units include common OP Units, partnership preferred units, or preferred OP Units, and high performance partnership units, or High Performance Units. The Aimco Operating Partnership’s income is allocated to holders of common OP Units based on the weighted average number of common OP Units outstanding during the period. The Aimco Operating Partnership records the issuance of common OP Units and the assets acquired in purchase transactions based on the market price of Aimco Class A Common Stock (which we refer to as Common Stock) at the date of closing of the transaction. The holders of the common OP Units receive distributions, prorated from the date of issuance, in an amount equivalent to the dividends paid to holders of Common Stock. Holders of common OP Units may redeem such units for cash or, at the Aimco Operating Partnership’s option, Common Stock. During each of 2006, 2005 and 2004, the weighted average ownership interest in the Aimco Operating Partnership held by the common OP Unit holders was approximately 10%. Preferred OP Units entitle the holders thereof to a preference with respect to distributions or upon liquidation. At December 31, 2006, 96,820,252 shares of our Common Stock were outstanding and the Aimco Operating Partnership had 10,135,562 common OP Units and equivalents outstanding for a combined total of 106,955,814 shares of Common Stock and OP Units outstanding (excluding preferred OP Units).

Except as the context otherwise requires, “we,” “our,” “us” and the “Company” refer to Aimco, the Aimco Operating Partnership and their consolidated entities, collectively.

Note 2 — Basis of Presentation and Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Aimco, the Aimco Operating Partnership, and their consolidated entities. As used herein, and except where the context otherwise requires, “partnership” refers to a limited partnership or a limited liability company and “partner” refers to a limited partner

F-8

in a limited partnership or a member in a limited liability company. Interests held in consolidated real estate partnerships by limited partners other than us are reflected as minority interest in consolidated real estate partnerships. All significant intercompany balances and transactions have been eliminated in consolidation. The assets of consolidated real estate partnerships owned or controlled by Aimco or the Aimco Operating Partnership generally are not available to pay creditors of Aimco or the Aimco Operating Partnership.

As discussed underVariable Interest Entitiesbelow, we consolidate real estate partnerships and other entities that are variable interest entities when we are the primary beneficiary. Generally, we consolidate real estate partnerships and other entities that are not variable interest entities when we own, directly or indirectly, a majority voting interest in the entity. As discussed underAdoption of EITF04-5below, we have applied new criteria after June 29, 2005, in determining whether we control and consolidate certain partnerships.

Variable Interest Entities

FASB Interpretation No. 46 (revised December 2003),Consolidation of Variable Interest Entities, or FIN 46, addresses the consolidation by business enterprises of variable interest entities. As a result of the adoption of FIN 46, as of March 31, 2004, we consolidate all variable interest entities for which we are the primary beneficiary. Generally, a variable interest entity, or VIE, is an entity with one or more of the following characteristics: (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support; (b) as a group, the holders of the equity investment at risk lack (i) the ability to make decisions about an entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. FIN 46 requires a VIE to be consolidated in the financial statements of the entity that is determined to be the primary beneficiary of the VIE. The primary beneficiary generally is the entity that will receive a majority of the VIE’s expected losses, receive a majority of the VIE’s expected residual returns, or both.

Upon adoption of FIN 46, we determined that we were the primary beneficiary of 27 previously unconsolidated and five previously consolidated VIEs. These VIEs consisted of partnerships that are engaged, directly or indirectly, in the ownership and management of 29 apartment properties with 3,478 units. The initial consolidation of the previously unconsolidated entities as of March 31, 2004 resulted in an increase in our consolidated total assets (primarily real estate), liabilities (primarily indebtedness) and minority interest of approximately $113.5 million, $90.6 million and $26.8 million, respectively. We recorded a charge of approximately $4.0 million for the cumulative effect on retained earnings resulting from the adoption of FIN 46. This charge is attributable to our recognition of cumulative losses allocable to minority interests that would otherwise have resulted in minority interest deficits.

As of December 31, 2006, we were the primary beneficiary of, and therefore consolidated, 53 VIEs, which owned 49 apartment properties with 6,845 units. Real estate with a carrying value of $457.2 million collateralized the debt of those VIEs. The creditors of the consolidated VIEs do not have recourse to our general credit. As of December 31, 2006, we also held variable interests in 188 VIEs for which we were not the primary beneficiary. Those VIEs consist primarily of partnerships that are engaged, directly or indirectly, in the ownership and management of 246 apartment properties with 13,371 units. We are involved with those VIEs as an equity holder, lender, management agent, or through other contractual relationships. At December 31, 2006, our maximum exposure to loss as a result of our involvement with unconsolidated VIEs is limited to our recorded investments in and receivables from those VIEs totaling $131.0 million and our contractual obligation to advance funds to certain VIEs totaling $14.4 million. We may be subject to additional losses to the extent of any financial support that we voluntarily provide in the future.

Adoption of EITF04-5

In June 2005, the Financial Accounting Standards Board ratified Emerging Issues Task Force Issue04-5,Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights, or EITF04-5. EITF04-5 provides an accounting

F-9

model to be used by a general partner, or group of general partners, to determine whether the general partner(s) controls a limited partnership or similar entity in light of substantive kick-out rights and substantive participating rights held by the limited partners, and provides additional guidance on what constitutes those rights. EITF04-5 was effective after June 29, 2005 for general partners of (a) all newly formed limited partnerships and (b) existing limited partnerships for which the partnership agreements have been modified. We consolidated four partnerships in the fourth quarter of 2005 based on EITF04-5 requirements. The consolidation of those partnerships had an immaterial effect on our consolidated financial statements. EITF04-5 was effective on January 1, 2006, for general partners of all limited partnerships and similar entities. We applied EITF04-5 as of January 1, 2006, using a transition method that does not involve retrospective application to our financial statements for prior periods.

We consolidated 156 previously unconsolidated partnerships as a result of the application of EITF04-5 in 2006. Those partnerships own, or control other entities that own, 149 apartment properties. Our direct and indirect interests in the profits and losses of those partnerships range from less than one percent to 50 percent, and average approximately 22 percent. The initial consolidation of those partnerships resulted in increases (decreases), net of intercompany eliminations, in amounts reported in our consolidated balance sheet as of January 1, 2006, as follows (in thousands):


	Increase
	(Decrease)

Real estate, net	$	664,286
Accounts and notes receivable from affiliates		(150,057	)
Investment in unconsolidated real estate partnerships		(64,419	)
All other assets		122,545

Total assets	$	572,355

Total indebtedness	$	521,711
All other liabilities		81,950
Minority interest in consolidated real estate partnerships		53,258
Minority interest in Aimco Operating Partnership		(9,552	)
Stockholders’ equity		(75,012	)

Total liabilities and stockholders’ equity	$	572,355

Our income from continuing operations for the year ended December 31, 2006, include the following amounts for the partnerships consolidated as of January 1, 2006, in accordance with EITF04-5 (in thousands):


Revenues	$	159,415
Operating expenses		114,680

Operating income		44,735
Interest expense		(32,776	)
Interest income		3,651

Income (loss) before minority interests	$	15,610

In prior periods, we used the equity method to account for our investments in the partnerships that we consolidated in 2006 in accordance with EITF04-5. Under the equity method, we recognized partnership income or losses based generally on our percentage interest in the partnership. Consolidation of a partnership does not ordinarily result in a change to the net amount of partnership income or loss that is recognized using the equity method. However, when a partnership has a deficit in equity, generally accepted accounting principles may require the controlling partner that consolidates the partnership to recognize any losses that would otherwise be allocated to noncontrolling partners, in addition to the controlling partner’s share of losses. Certain of the partnerships that we consolidated in accordance with EITF04-5 had deficits in equity that resulted from losses or deficit distributions during prior periods when we accounted for our investment using the equity method. We would have been required to recognize the noncontrolling partners’ share of those losses had we applied EITF04-5 in those prior periods. In

F-10

accordance with our transition method for the adoption of EITF04-5, we recorded a $75.0 million charge to retained earnings as of January 1, 2006, for the cumulative amount of additional losses that we would have recognized had we applied EITF04-5 in prior periods. Substantially all of those losses were attributable to real estate depreciation expense. As a result of applying EITF04-5 for the year ended December 31, 2006, our income from continuing operations includes partnership losses in addition to losses that would have resulted from continued application of the equity method of $25.0 million.

Tax Credit Arrangements

We sponsor certain partnerships that own and operate apartment properties that qualify for tax credits under Section 42 of the Internal Revenue Code and HUD subsidized rents under the Section 8 program. These partnerships acquire, develop and operate qualifying affordable housing properties and are structured to provide for the pass-through of tax credits and deductions to their partners. The tax credits are generally realized ratably over the first ten years of the tax credit arrangement and are subject to the partnership’s compliance with applicable laws and regulations for a period of 15 years. Typically, we are the general partner with a legal ownership interest of one percent or less. We market limited partner interests of at least 99 percent to unaffiliated institutional investors (“tax credit investors” or “investors”) and receive a syndication fee from each investor upon such investor’s admission to the partnership. At inception, each investor agrees to fund capital contributions to the partnerships. We agree to perform various services to the partnerships in exchange for fees over the expected duration of the tax credit service period. The related partnership agreements generally require adjustment of each tax credit investor’s required capital contributions if actual tax benefits to such investor differ from projected amounts.

In connection with our adoption of FIN 46 as of March 31, 2004, we determined that the partnerships in these arrangements are variable interest entities and, where we are general partner, we are the primary beneficiary that is required to consolidate the partnerships. During the period April 1, 2004, through June 30, 2006, we accounted for these partnerships as consolidated subsidiaries with a noncontrolling interest (minority interest) of at least 99 percent. Accordingly, we allocated to the minority interest substantially all of the income or losses of the partnerships, including the effect of fees that we charged to the partnerships. In 2006, in consultation with our independent auditors, we determined that we were required to revise our accounting treatment for tax credit transactions to more fully comply with the requirements of FIN 46. We also determined that our accounting treatment did not fully reflect the economic substance of the arrangements wherein we possess substantially all of the economic interests in the partnerships. Based on the contractual arrangements that obligate us to deliver tax benefits to the investors, and that entitle us through fee arrangements to receive substantially all available cash flow from the partnerships, we concluded that these partnerships are most appropriately accounted for by us as wholly owned subsidiaries. We also concluded that capital contributions received by the partnerships from tax credit investors represent, in substance, consideration that we receive in exchange for our obligation to deliver tax credits and other tax benefits to the investors. We have concluded that these receipts are appropriately recognized as revenue in our consolidated financial statements when our obligation to the investors is relieved upon delivery of the expected tax benefits.

In summary, our revised accounting treatment recognizes the income or loss generated by the underlying real estate based on our economic interest in the partnerships. Proceeds received in exchange for the transfer of the tax credits are recognized as revenue proportionately as the tax benefits are delivered to the tax credit investors and our obligation is relieved. Syndication fees and related costs are recognized in income upon completion of the syndication effort. Other direct and incremental costs incurred in structuring these arrangements are deferred and amortized over the expected duration of the arrangement in proportion to the recognition of related income. Investor contributions in excess of recognized revenue are reported as deferred income in our consolidated balance sheet.

We have applied the revised accounting treatment described above in our 2006 financial statements. We also recognized the cumulative effect of retroactive application of this revised accounting treatment in our operations for

F-11

the year ended December 31, 2006. Adjustments related to prior years had the following effects on our net income for the year ended December 31, 2006 (in thousands):


Revenues	$	(1,542	)
Operating expenses		3,054
Minority interest in consolidated real estate partnerships		(9,030	)
Minority interest in Aimco Operating Partnership		734

Net decrease in net income	$	(6,784	)

Acquisition of Real Estate Assets and Related Depreciation and Amortization

We capitalize the purchase price and incremental direct costs associated with the acquisition of properties as the cost of the assets acquired. In accordance with Statement of Financial Accounting Standards No. 141,Business Combinations, or SFAS 141, we allocate the cost of acquired properties to tangible assets and identified intangible assets based on their fair values. We determine the fair value of tangible assets, such as land, building, furniture, fixtures and equipment, on an “as-if vacant” basis, generally using internal valuation techniques that consider comparable market transactions, discounted cash flow techniques, replacement costs and other available information. We determine the fair value of identified intangible assets (or liabilities), which typically relate to in-place leases, using internal valuation techniques that consider the terms of the in-place leases, current market data for comparable leases, and our experience in leasing similar properties. The intangible assets or liabilities related to in-place leases are comprised of:


	1.	The value of the above- and below-market leases in-place. An asset or liability is recognized based on the difference between (a) the contractual amounts to be paid pursuant to the in-place leases and (b) our estimate of fair market lease rates for the corresponding in-place leases, measured over the period, including estimated lease renewals for below-market leases, that the leases are expected to remain in effect.

	2.	The estimated unamortized portion of avoided leasing commissions and other costs that ordinarily would be incurred to acquire the in-place leases.

	3.	The value associated with vacant units during the absorption period (estimates of lost rental revenue during the expectedlease-up periods based on current market demand and stabilized occupancy levels).

The values of the above- and below-market leases are amortized to rental revenue over the expected remaining terms of the associated leases. Other intangible assets related to in-place leases are amortized to operating expenses over the expected remaining terms of the associated leases. Amortization is adjusted, as necessary, to reflect any early lease terminations that were not anticipated in determining amortization periods.

Depreciation for all tangible real estate assets is calculated using the straight-line method over their estimated useful lives. Acquired buildings and improvements are depreciated over a composite life of 14 to 52 years, based on the age, condition and other physical characteristics of the property. As discussed underImpairment of Long Lived Assetsbelow, we may adjust depreciation of properties that are expected to be disposed of or demolished prior to the end of their useful lives. Furniture, fixtures and equipment associated with acquired properties are depreciated over five years.

Capital Expenditures and Related Depreciation

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expenditure activities, including ordinary repairs, maintenance, resident turnover costs and general and administrative expenses.

We depreciate capitalized costs using the straight-line method over the estimated useful life of the related component or improvement, which is five, 15 or 30 years. Prior to July 1, 2005, we recorded capitalized site payroll costs and most capitalized indirect costs separately from other costs of the related capital projects. We depreciated capitalized site payroll costs over five years and capitalized indirect costs associated with capital replacement and improvement projects over five or 15 years. Capitalized indirect costs associated with redevelopment projects, together with other costs of the redevelopment projects, were depreciated over the estimated useful lives of those projects, predominantly 30 years.

Effective July 1, 2005, we refined the estimated useful lives for the capitalized site payroll and indirect costs that were recorded separately from other costs of the related capital projects. All capitalized site payroll and indirect costs incurred after June 30, 2005 are allocated proportionately, based on direct costs, among capital projects and depreciated over the estimated useful lives of such projects. This change in estimate is also being applied prospectively to the June 30, 2005 carrying amounts, net of accumulated depreciation, of previously incurred site payroll and indirect costs. Those amounts, based on the periods the costs were incurred, were allocated among capital projects that were completed in the corresponding periods in proportion to the original direct costs of such projects and are being depreciated over the remaining useful lives of the projects. We anticipate that these refinements will result in generally higher depreciation expense in foreseeable future accounting periods. For the year ended December 31, 2005, these changes in estimated useful lives resulted in a decrease in net income of approximately $4.6 million, and resulted in a decrease in basic and diluted earnings per share of $0.05.

Certain homogeneous items that are purchased in bulk on a recurring basis, such as carpeting and appliances, are depreciated using group methods that reflect the average estimated useful life of the items in each group. Except in the case of property casualties, where the net book value of lost property is written off in the determination of casualty gains or losses, we generally do not recognize any loss in connection with the replacement of an existing property component because normal replacements are considered in determining the estimated useful lives used in connection with our composite and group depreciation methods.

For the years ended December 31, 2006, 2005 and 2004, we capitalized interest costs totaling $24.7 million, $18.1 million and $9.5 million, respectively, and site payroll and indirect costs totaling $66.2 million, $53.3 million and $46.7 million, respectively.

Asset Retirement Obligations

In March 2005, the FASB issued FASB Interpretation No. 47,Accounting for Conditional Asset Retirement Obligations, or FIN 47. FIN 47 clarifies the accounting for legal obligations to perform asset retirement activity in which the timingand/or method of settlement are conditional on future events. FIN 47 requires the fair value of such conditional asset retirement obligations to be recorded as incurred, if the fair value of the liability can be reasonably estimated. We have determined that FIN 47 applies to certain obligations that we have based on laws that require property owners to remove or remediate hazardous substances in certain circumstances. We adopted the provisions of FIN 47 as of December 31, 2005 and determined that asset retirement obligations that are required to be recognized under FIN 47 are immaterial to our financial condition and results of operations. See Note 8 for further discussion of asset retirement obligations.

Impairment of Long-Lived Assets

We apply the provisions of Statement of Financial Accounting Standards No. 144,Accounting for the Impairment or Disposal of Long-Lived Assets, or SFAS 144, to determine whether our real estate and other long-lived assets are impaired. Such assets to be held and used are stated at cost, less accumulated depreciation and amortization, unless the carrying amount of the asset is not recoverable. If events or circumstances indicate that the carrying amount of a property may not be recoverable, we make an assessment of its recoverability by comparing the carrying amount to our estimate of the undiscounted future cash flows, excluding interest charges, of the property. If the carrying amount exceeds the aggregate undiscounted future cash flows, we recognize an impairment loss to the extent the carrying amount exceeds the estimated fair value of the property. Based on periodic tests of

F-13

recoverability of long-lived assets, for the year ended December 31, 2005, we recorded impairment losses of $3.4 million related to properties to be held and used. For the years ended December 31, 2006 and 2004, we determined that the carrying amounts of our properties to be held and used were recoverable and, therefore, we did not record any impairment losses related to such properties. The amounts reported in continuing operations for real estate impairment (losses) recoveries, net include impairment losses related to consolidated properties to be held and used, as well as our share of all impairment losses or recoveries related to unconsolidated properties. We report impairment losses or recoveries related to properties classified as held for sale in discontinued operations.

Our tests of recoverability address real estate assets that do not currently meet all conditions to be classified as held for sale, but are expected to be disposed of prior to the end of their estimated useful lives. If an impairment loss is not required to be recorded in accordance with SFAS 144, the recognition of depreciation is adjusted prospectively, as necessary, to reduce the carrying amount of the real estate to its estimated disposition value over the remaining period that the real estate is expected to be held and used. We also may adjust depreciation prospectively to reduce to zero the carrying amount of buildings that we plan to demolish in connection with a redevelopment project. These depreciation adjustments decreased net income by $31.2 million and $31.9 million, and resulted in decreases in basic and diluted earnings per share of $0.33 and $0.34, for the years ended December 31, 2006 and 2005, respectively.

Cash Equivalents

We consider highly liquid investments with an original maturity of three months or less to be cash equivalents.

Restricted Cash

Restricted cash includes capital replacement reserves, tax-free exchange funds, completion repair reserves, bond sinking fund amounts and tax and insurance escrow accounts held by lenders.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are generally comprised of amounts receivable from residents, amounts receivable from non-affiliated real estate partnerships for which we provide property management and other services and other miscellaneous receivables from non-affiliated entities. We evaluate collectibility of accounts receivable from residents and establish an allowance, after the application of security deposits and other anticipated recoveries, for accounts greater than 30 days past due for current residents and all receivables due from former residents. Accounts receivable from residents are stated net of allowances for doubtful accounts of approximately $1.9 million and $2.3 million as of December 31, 2006 and 2005, respectively.

We evaluate collectibility of accounts receivable from non-affiliated entities and establish an allowance for amounts that are considered to be uncollectible. Accounts receivable relating to non-affiliated entities are stated net of allowances for doubtful accounts of approximately $4.1 million and $4.2 million as of December 31, 2006 and 2005, respectively.

Accounts Receivable and Allowance for Doubtful Accounts from Affiliates

Accounts receivable from affiliates are generally comprised of receivables related to property management and other services provided to unconsolidated real estate partnerships in which we have an ownership interest. We evaluate collectibility of accounts receivable balances from affiliates on a periodic basis, and establish an allowance for the amounts deemed to be uncollectible. Accounts receivable from affiliates are stated net of allowances for doubtful accounts of approximately $5.3 million and $4.7 million as of December 31, 2006 and 2005, respectively.

Deferred Costs

We defer lender fees and other direct costs incurred in obtaining new financing and amortize the amounts over the terms of the related loan agreements. Amortization of these costs is included in interest expense.

We defer leasing commissions and other direct costs incurred in connection with successful leasing efforts and amortize the costs over the terms of the related leases. Amortization of these costs is included in operating expenses.

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Advertising Costs

We generally expense all advertising costs as incurred to property operating expense. For the years ended December 31, 2006, 2005 and 2004, for both continuing and discontinued operations, total advertising expense was $34.7 million, $36.1 million and $33.1 million, respectively.

Notes Receivable from Unconsolidated Real Estate Partnerships and Related Interest Income and Provision for Losses

Investments in Unconsolidated Real Estate Partnerships

We own general and limited partner interests in real estate partnerships that own apartment properties. We generally account for investments in real estate partnerships that we do not consolidate under the equity method. Under the equity method, our share of the earnings or losses of the entity for the periods being presented is included in equity in earnings (losses) from unconsolidated real estate partnerships, except for our share of impairments and property disposition gains related to such entities, which we report separately in the consolidated statements of income. Certain investments in real estate partnerships that were acquired in business combinations were determined to have insignificant value at the acquisition date and are accounted for under the cost method. Any distributions received from such partnerships are recognized as income when received.

The excess of the cost of the acquired partnership interests over the historical carrying amount of partners’ equity or deficit is ascribed generally to the fair values of land and buildings owned by the partnerships. We amortize the excess cost related to the buildings over the estimated useful lives of the buildings. Such amortization is recorded as a component of equity in losses of unconsolidated real estate partnerships.

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Intangible Assets

At December 31, 2006 and 2005, other assets included goodwill associated with our real estate segment of $81.9 million. We account for goodwill and other intangible assets in accordance with the requirements of Statement of Financial Accounting Standards No. 142,Goodwill and Other Intangible Assets, or SFAS 142. SFAS 142 does not permit amortization of goodwill and other intangible assets with indefinite lives, but requires an annual impairment test of such assets. The impairment test compares the fair value of reporting units with their carrying amounts, including goodwill. Based on the application of the goodwill impairment test set forth in SFAS 142, we determined that our goodwill was not impaired in 2006, 2005 or 2004. As discussed in Note 9, we reduced goodwill by $6.2 million in 2005 in connection with the recognition of deferred income tax assets that were acquired in connection with business combinations in prior years.

Other assets also includes intangible assets for purchased management contracts with finite lives that we amortize on a straight-line basis over terms ranging from five to twenty years and intangible assets for in-place leases as discussed underAcquisition of Real Estate Assets and Related Depreciation and Amortization.

Capitalized Software Costs

Purchased software and other costs related to software developed for internal use are capitalized during the application development stage and are amortized using the straight-line method over the estimated useful life of the software, generally five years. We write off the costs of software development projects when it is no longer probable that the software will be completed and placed in service. For the years ended December 31, 2006, 2005 and 2004, we capitalized software development costs totaling $6.3 million, $9.9 million and $18.1 million, respectively. At December 31, 2006 and 2005, other assets included $31.6 million and $40.2 million of net capitalized software, respectively.

Minority Interest in Consolidated Real Estate Partnerships

We report unaffiliated partners’ interests in consolidated real estate partnerships as minority interest in consolidated real estate partnerships. Minority interest in consolidated real estate partnerships represents the minority partners’ share of the underlying net assets of our consolidated real estate partnerships. When these consolidated real estate partnerships make cash distributions to partners in excess of the carrying amount of the minority interest, we generally record a charge equal to the amount of such excess distribution, even though there is no economic effect or cost. We report this charge in the consolidated statements of income as deficit distributions to minority partners. We allocate the minority partners’ share of partnership losses to minority partners to the extent of the carrying amount of the minority interest. We generally record a charge when the minority partners’ share of partnership losses exceed the carrying amount of the minority interest, even though there is no economic effect or cost. We report this charge in the consolidated statements of income within minority interest in consolidated real estate partnerships. We do not record charges for distributions or losses in certain limited instances where the minority partner has a legal obligation and financial capacity to contribute additional capital to the partnership. For the years ended December 31, 2006, 2005, and 2004, we recorded charges for partnership losses resulting from depreciation of approximately $31.8 million, $9.5 million and $5.2 million, respectively, that were not allocated to minority partners because the losses exceeded the carrying amount of the minority interest.

Minority interest in consolidated real estate partnerships consists primarily of equity interests held by limited partners in consolidated real estate partnerships that have finite lives. The terms of the related partnership agreements generally require the partnership to be liquidated following the sale of the partnership’s real estate. As the general partner in these partnerships, we ordinarily control the execution of real estate sales and other events that could lead to the liquidation, redemption or other settlement of minority interests. The aggregate carrying value of minority interests in consolidated real estate partnerships is approximately $212.1 million at December 31, 2006. The aggregate fair value of these interests varies based on the fair value of the real estate owned by the partnerships. Based on the number of classes of finite-life minority interests, the number of properties in which there is direct or indirect minority ownership, complexities in determining the allocation of liquidation proceeds among partners and other factors, we believe it is impracticable to determine the total required payments to the minority interests in an assumed liquidation at December 31, 2006. As a result of real estate depreciation that is recognized in our financial

F-16

statements and appreciation in the fair value of real estate that is not recognized in our financial statements, we believe that the aggregate fair value of our minority interests exceeds their aggregate carrying value. As a result of our ability to control real estate sales and other events that require payment of minority interests and our expectation that proceeds from real estate sales will be sufficient to liquidate related minority interests, we anticipate that the eventual liquidation of these minority interests will not have an adverse impact on our financial condition.

Revenue Recognition

Our properties have operating leases with apartment residents with terms generally of twelve months or less. We recognize rental revenue related to these leases, net of any concessions, on a straight-line basis over the term of the lease. We recognize revenues from property management, asset management, syndication and other services when the related fees are earned and are realized or realizable.

Stock-Based Compensation

On January 1, 2006 we adopted Statement of Financial Accounting Standards No. 123 (revised 2004),Share-Based Payment(see Note 12).

Discontinued Operations

In accordance with SFAS 144, we classify certain properties and related liabilities as held for sale (see Note 13). The operating results of such properties are presented in discontinued operations in both current periods and all comparable periods presented. Depreciation is not recorded on properties held for sale; however, depreciation expense recorded prior to classification as held for sale is included in discontinued operations. The net gain on sale and any impairment losses are presented in discontinued operations when recognized.

Derivative Financial Instruments

We primarily use long-term, fixed-rate andself-amortizing non-recourse debt to avoid, among other things, risk related to fluctuating interest rates. For our variable rate debt, we are sometimes required by our lenders to limit our exposure to interest rate fluctuations by entering into interest rate swap or cap agreements. The interest rate swap agreements moderate our exposure to interest rate risk by effectively converting the interest on variable rate debt to a fixed rate. The interest rate cap agreements effectively limit our exposure to interest rate risk by providing a ceiling on the underlying variable interest rate. The fair values of these instruments are reflected as assets or liabilities in the balance sheet, and periodic changes in fair value are included in interest expense. These instruments are not material to our financial position and results of operations.

Insurance

We believe that our insurance coverages insure our properties adequately against the risk of loss attributable to fire, earthquake, hurricane, tornado, flood, and other perils. In addition, we have insurance coverage for substantial portions of our property, workers’ compensation, health, and general liability exposures. Losses are accrued based upon our estimates of the aggregate liability for uninsured losses incurred using certain actuarial assumptions followed in the insurance industry and based on our experience.

Income Taxes

We have elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, which we refer to as the Code, commencing with our taxable year ended December 31, 1994, and intend to continue to operate in such a manner. Our current and continuing qualification as a REIT depends on our ability to meet the various requirements imposed by the Code, which are related to organizational structure, distribution levels, diversity of stock ownership and certain restrictions with regard to owned assets and categories of income. If we qualify for taxation as a REIT, we will generally not be subject to United States Federal corporate income tax on our taxable income that is currently distributed to stockholders. This treatment substantially eliminates the “double taxation” (at the corporate and stockholder levels) that generally results from investment in a corporation.

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Even if we qualify as a REIT, we may be subject to United States Federal income and excise taxes in various situations, such as on our undistributed income. We also will be required to pay a 100% tax on any net income on non-arms length transactions between us and a TRS (described below) and on any net income from sales of property that was property held for sale to customers in the ordinary course. We and our stockholders may be subject to state or local taxation in various state or local jurisdictions, including those in which we transact business or our stockholders reside. In addition, we could also be subject to the alternative minimum tax, or AMT, on our items of tax preference. Any taxes imposed on us could reduce our operating cash flow and net income. The state and local tax laws may not conform to the United States Federal income tax treatment.

Certain of our operations (property management, asset management, risk, etc.) are conducted through taxable REIT subsidiaries, which are subsidiaries of the Aimco Operating Partnership and each of which we refer to as a TRS. A TRS is a C-corporation that has not elected REIT status and as such is subject to United States Federal corporate income tax. We use TRS entities to facilitate our ability to offer certain services and activities to our residents, as these services and activities generally cannot be offered directly by the REIT.

For our taxable REIT subsidiaries, deferred income taxes result from temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for Federal income tax purposes, and are measured using the enacted tax rates and laws that are expected to be in effect when the differences reverse. We reduce deferred tax assets by recording a valuation allowance when we determine based on available evidence that it is more likely than not that the assets will not be realized.

Earnings per Share

We calculate earnings per share based on the weighted average number of shares of Common Stock, common stock equivalents, and other potentially dilutive securities outstanding during the period (see Note 14).

Fair Value of Financial Instruments

We believe that the aggregate fair value of our cash and cash equivalents, receivables, payables and short-term secured debt approximates their aggregate carrying value at December 31, 2006, due to their relatively short-term nature and high probability of realization. We further believe that the aggregate fair value of our variable rate secured tax-exempt bond financing, variable rate property loans payable, term loans and borrowings under our credit facility also approximate their aggregate carrying value due to terms in the related agreements that require periodic interest adjustments based on market interest rates. For notes receivable, fixed rate secured tax-exempt bond debt and secured long-term debt, we estimate fair values using present value techniques. Present value calculations vary depending on the assumptions used, including the discount rate and estimates of future cash flows. We estimate fair value for our fixed rate debt instruments based on the market rate for debt with the same or similar terms. In many cases, the fair value estimates may not be realizable in immediate settlement of the instruments. The estimated aggregate fair value of our notes receivable was approximately $181 million and $211 million at December 31, 2006 and 2005, respectively. See Note 5 for further information on notes receivable. The estimated aggregate fair value of our secured tax-exempt bonds and property loans payable, including amounts reported in liabilities related to assets held for sale was approximately $6.4 billion and $5.8 billion at December 31, 2006, and December 31, 2005, respectively. The combined carrying value of our secured tax-exempt bonds and property loans payable, including amounts reported in liabilities related to assets held for sale, was approximately $6.3 billion and $5.7 billion at December 31, 2006 and 2005, respectively. See Note 6 for further details on secured tax-exempt bonds and secured notes payable.

Concentration of Credit Risk

Financial instruments that potentially could subject us to significant concentrations of credit risk consist principally of notes receivable. As discussed in Note 5, a significant portion of our notes receivable at December 31, 2006, are collateralized by properties in the West Harlem district of New York City. There are no other significant concentrations of credit risk with respect to our notes receivable due to the large number of partnerships that are borrowers under the notes and the geographic diversity of the properties that collateralize the notes.

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Use of Estimates

The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts included in the financial statements and accompanying notes thereto. Actual results could differ from those estimates.

Reclassifications

Certain items included in the 2005 and 2004 financial statements amounts have been reclassified to conform to the 2006 presentation.

Note 3 — Acquisitions

Real Estate Acquisitions

During 2006, we completed acquisitions of nine properties (including one property acquired by an unconsolidated joint venture), containing approximately 1,700 residential units for an aggregate purchase price of approximately $177.0 million, including transaction costs. Of the nine properties acquired, three are located in Pacifica, California; one in Chico, California; three in metro Jacksonville, Florida; one in Tampa, Florida; and one in Greenville, North Carolina. The purchases were funded with cash, new debt and the assumption of existing debt.

During 2005, we completed acquisitions of six properties (including Palazzo East at Park La Brea), containing approximately 1,006 residential units and six retail spaces for an aggregate purchase price of approximately $283.6 million, including transaction costs. Of the six properties acquired, four are located in the New York City area, one in Los Angeles, and one in New Jersey. The purchases were funded with cash, new debt and the assumption of existing debt.

Acquisitions of Partnership Interests

During 2006 and 2005, we acquired limited partnership interests in 48 partnerships and 84 partnerships, respectively, in which our affiliates served as general partner. In connection with such acquisitions, during 2006 we paid cash of approximately $18.4 million, including transaction costs, and during 2005 we paid approximately $56.0 million, including transaction costs, of which $55.6 million was in cash and the remainder in OP Units. The 2006 and 2005 amounts were approximately $24.3 million and $60.6 million, respectively, in excess of the carrying amount of minority interest in such limited partnerships, which excess we generally assigned to real estate.

Note 4 — Investments in Unconsolidated Real Estate Partnerships

We owned general and limited partner interests in unconsolidated real estate partnerships owning approximately 102, 264 and 330 properties at December 31, 2006, 2005 and 2004, respectively. We acquired these interests through various transactions, including large portfolio acquisitions and offers to individual limited partners. Our total ownership interests in these unconsolidated real estate partnerships ranges typically from less than 1% to 50%.

The following table provides selected combined financial information for unconsolidated real estate partnerships as of and for the years ended December 31, 2006, 2005 and 2004 (in thousands):


	2006			2005			2004

Real estate, net of accumulated depreciation	$	146,400		$	763,219		$	1,004,501
Total assets		166,874			954,970			1,255,434
Secured and other notes payable		140,089			932,454			1,146,141
Total liabilities		199,082			1,248,450			1,545,250
Partners’ equity (deficit)		(32,208	)		(293,480	)		(289,816	)
Rental and other property revenues		99,708			311,429			320,687
Property operating expenses		(49,451	)		(177,970	)		(201,248	)
Depreciation expense		(18,769	)		(63,056	)		(72,577	)
Interest expense		(24,146	)		(84,252	)		(99,120	)
Gain on sale		2,980			106,465			100,669
Net income (loss)		(1,443	)		82,123			50,778

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Theyear-to-year decreases in amounts in the above table reflect dispositions of real estate owned by the unconsolidated real estate partnerships and the consolidation of certain partnerships previously accounted for under the equity method, including 156 partnerships consolidated in 2006 in connection with the adoption of EITF04-5.

As a result of our acquisition of interests in unconsolidated real estate partnerships at a cost in excess of the historical carrying amount of the partnerships’ net assets, our aggregate investment in these partnerships at December 31, 2006 and 2005 of $39.0 million and $173.4 million, respectively, exceeds our share of the underlying historical partners’ deficit of the partnerships by approximately $44.8 million and $241.7 million, respectively.

Note 5 — Notes Receivable

The following table summarizes our notes receivable at December 31, 2006 and 2005 (in thousands):


	2006								2005
	Unconsolidated								Unconsolidated
	Real Estate			Non-					Real Estate			Non-
	Partnerships			Affiliates		Total			Partnerships			Affiliates		Total

Par value notes	$	40,055		$	18,815	$	58,870		$	89,640		$	22,681	$	112,321
Discounted notes		6,064			120,537		126,601			92,451			1,079		93,530
Allowance for loan losses		(5,478	)		—		(5,478	)		(4,891	)		—		(4,891	)

Total notes receivable		40,641		$	139,352	$	179,993		$	177,200		$	23,760	$	200,960

Face value of discounted notes	$	41,781		$	145,024	$	186,805		$	130,342		$	—	$	130,342

Included in notes receivable from unconsolidated real estate partnerships at December 31, 2006 and 2005, are $6.0 million and $28.8 million, respectively, in notes that were secured by interests in real estate or interests in real estate partnerships. We earn interest on these secured notes receivable at various annual interest rates ranging between 6.0% and 12.0% and averaging 10.3%.

Notes receivable from non-affiliates at December 31, 2006 include notes receivable totaling $81.6 million from 31 entities (the “borrowers”) that are wholly owned by a single individual. We originated these notes in November 2006 pursuant to a loan agreement that provides for total funding of approximately $110 million, including $14.4 million for property improvements and an interest reserve which have not yet been funded. The notes mature in ten years, bear interest at LIBOR plus 2.0%, are partially guaranteed by the owner of the borrowers, and are collateralized by second mortgages on 87 buildings containing 1,597 residential units and 42 commercial spaces in West Harlem, New York City. In conjunction with the loan agreement, we entered into a purchase option and put agreement with the borrowers under which we may purchase some or all of the buildings and, subject to achieving specified increases in rental income, the borrowers may require us to purchase the buildings. Our potential purchase of the buildings pursuant to the purchase option and put agreement may ultimately require cash paymentsand/or assumption of first mortgage debt totaling approximately $139 million to $206 million, in addition to amounts funded and committed under the loan agreement, depending on rental income levels and real estate fair values. We determined that the stated interest rate on the notes is a below-market interest rate and recorded a $19.4 million discount to reflect the estimated fair value of the notes based on an estimated market interest rate of LIBOR plus 4.0%. The discount was determined to be attributable to our real estate purchase option, which we recorded separately in other assets. The purchase option asset will be included in the cost of properties acquired pursuant to the option or otherwise be charged to expense. We determined that the borrowers are VIEs and, based on qualitative and quantitative analysis, determined that the individual who owns the borrowers and partially guarantees the notes is the primary beneficiary.

Included in notes receivable from non-affiliates at December 31, 2006 and 2005, are $6.0 million and $6.4 million, respectively, in other notes that were secured by interests in real estate or interests in real estate partnerships. We earn interest on these secured notes receivable at various annual interest rates ranging between 4.0% and 7.4% and averaging 6.5%. At December 31, 2006, notes receivable from non-affiliates also includes a $38.7 million unsecured discounted receivable, reflecting $50.0 million due in 2009 and an imputed interest rate of 12%.

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Notes receivable from non-affiliates at December 31, 2005, includes $2.5 million due from Alan I. Casden, representing the unpaid balance of notes receivable related to the settlement of litigation involving a company that was acquired in connection with the March 2002 acquisition of Casden Properties, Inc. (which we refer to as the Casden Transactions). The notes were secured by certain shares of Common Stock and certain cash settlement proceeds. In 2004, we entered into an agreement with respect to certain proceeds to be received by Mr. Casden and his right to deliver Common Stock at anagreed-upon value of $47 per share in satisfaction of the notes. Pursuant to this agreement, in 2004 we received $20 million in cash as payment in full on three notes due in 2004, 2005 and 2006. In 2005, we received cash payments of $7.0 million in satisfaction of the note due in 2007 and in partial satisfaction of the note due in 2008. In 2006, we received a final payment of $2.5 million in satisfaction of the note due in 2008. The 2004 agreement resolved a contingency based on the price of our Common Stock related to the Casden Transactions. In accordance with SFAS 141, in 2004 we recorded a $4.8 million charge to additional paid-in capital, representing the difference between the $29.1 million fair value of the consideration to be paid pursuant to the 2004 agreement and the $33.9 million carrying amount of the notes.

Interest income from total non-impaired par value and certain discounted notes for the years ended December 31, 2006, 2005 and 2004 totaled $5.8 million, $19.2 million and $20.5 million, respectively. For the years ended December 31, 2006, 2005, and 2004, we recognized accretion income on certain discounted notes of approximately $6.7 million, $2.5 million and $6.3 million, respectively.

The activity in the allowance for loan losses in total for both par value notes and discounted notes for the years ended December 31, 2006 and 2005, is as follows (in thousands):


	2006			2005

Balance at beginning of year	$	(4,891	)	$	(7,149	)
Provisions for losses on notes receivable		(3,104	)		(577	)
Recoveries of losses on notes receivable		320			1,942
Net reductions due to consolidation of real estate partnerships and property dispositions		2,197			893

Balance at end of year	$	(5,478	)	$	(4,891	)

During the years ended December 31, 2006 and 2005, we determined that an allowance for loan losses of $3.4 million and $2.4 million, respectively, was required on certain of our par value notes that had carrying values of $9.0 million and $6.5 million, respectively. The average recorded investment in the impaired par value notes for the years ended December 31, 2006, 2005 and 2004 was $7.0 million, $6.7 million and $11.8 million, respectively. The remaining $49.9 million in par value notes receivable at December 31, 2006 is estimated to be collectible and, therefore, interest income on these par value notes is recognized as it is earned.

As of December 31, 2006 and 2005, we determined that an allowance for loan losses of $2.0 million and $2.5 million, respectively, was required on certain of our discounted notes that had carrying values of $4.4 million and $5.0 million, respectively. The average recorded investment in the impaired discounted notes for the years ended December 31, 2006 and 2005 was $4.6 million and $5.0 million, respectively.

Note 6 — Secured Tax-Exempt Bond Financings, Property Loans Payable and Other Borrowings

The following table summarizes our secured tax-exempt bond financings at December 31, 2006 and 2005, the majority of which is non-recourse to us (in thousands):


	Weighted Average
	Interest Rate			Principal Outstanding
	2006			2006		2005

Fixed rate secured tax-exempt bonds payable		5.76	%	$	295,532	$	280,147
Variable rate secured tax-exempt bonds payable		4.23	%		640,550		715,750

Total				$	936,082	$	995,897

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Fixed rate secured tax-exempt bonds payable mature at various dates through October 2045. Variable rate secured tax-exempt bonds payable mature at various dates through June 2034. Principal and interest on these bonds are generally payable in semi-annual installments or in monthly interest-only payments with balloon payments due at maturity. Certain of our tax-exempt bonds at December 31, 2006 are remarketed periodically by a remarketing agent to maintain a variable yield. If the remarketing agent is unable to remarket the bonds, then the remarketing agent can put the bonds to us. We believe that the likelihood of this occurring is remote. At December 31, 2006, our secured tax-exempt bond financings were secured by 72 properties with a combined net book value of $1,435.7 million.

The following table summarizes our property loans payable at December 31, 2006 and 2005, the majority of which are non-recourse to us (in thousands):


	Weighted Average
	Interest Rate			Principal Outstanding
	2006			2006		2005

Conventional fixed rate secured notes payable		6.35	%	$	4,846,259	$	3,689,730
Conventional variable rate secured notes payable		6.53	%		370,113		554,748
Secured notes credit facility		5.34	%		112,639		76,210

Total				$	5,329,011	$	4,320,688

Fixed rate secured notes payable mature at various dates through August 2053. Variable rate secured notes payable mature at various dates through July 2021. Principal and interest are generally payable monthly or in monthly interest-only payments with balloon payments due at maturity. At December 31, 2006, our secured notes payable were secured by 608 properties with a combined net book value of $7,500.6 million.

We have a secured revolving credit facility that provides for borrowings of up to $250 million primarily to be used for financing properties that we generally intend to hold for the intermediate term, as well as properties that are designated for redevelopment. In addition to the amounts in the above table, there were approximately zero and $4.0 million of notes that were provided through this facility that are obligations of unconsolidated real estate partnerships and not included within secured notes payable at December 31, 2006 and 2005, respectively. The interest rate on the notes provided through this facility is the Fannie Mae Discounted Mortgage-Backed Security index plus 0.85% (for those loans with debt coverage ratios greater than or equal to 1.70) or 1.05% (for those loans with debt service coverage ratios less than 1.70), which interest rate resets monthly. Each such loan under this facility is treated as a separate borrowing and is collateralized by a specific property, and none of the loans is cross-collateralized or cross-defaulted. This facility matures in September 2007, but can be terminated and repaid in full without penalty.

Our consolidated debt instruments generally contain covenants common to the type of facility or borrowing, including financial covenants establishing minimum debt service coverage ratios and maximum leverage ratios. At December 31, 2006, we were in material compliance with all financial covenants pertaining to our consolidated debt instruments.

Other borrowings totaled $67.7 million and $88.3 million at December 31, 2006 and 2005, respectively, and consist primarily of unsecured notes payable and obligations under sale and leaseback arrangements accounted for as financings. At December 31, 2006, other borrowings includes $59.2 million in fixed rate obligations with interest rates ranging from zero to 10.0% and $8.5 million in variable rate obligations bearing interest at the prime rate plus 1.75%. The maturity dates for other borrowings range from 2007 to 2039, although certain amounts are due upon occurrence of specified events, such as property sales.

F-22

As of December 31, 2006, the scheduled principal amortization and maturity payments for our secured tax-exempt bonds, secured notes payable and other borrowings are as follows (in thousands):


	Amortization		Maturities		Total

2007	$	146,807	$	303,041	$	449,848
2008		139,955		393,993		533,948
2009		143,258		400,202		543,460
2010		151,025		187,399		338,424
2011		159,083		349,688		508,771
Thereafter						3,958,302

					$	6,332,753

Note 7 — Term Loans and Credit Facility

On November 2, 2004, we entered into an Amended and Restated Senior Secured Credit Agreement, which we refer to as the Credit Agreement, with a syndicate of financial institutions. In addition to Aimco, the Aimco Operating Partnership and an Aimco subsidiary are also borrowers under the Credit Agreement. The Credit Agreement replaced our previous two separate credit agreements.

The Credit Agreement includes customary financial covenants, including the maintenance of specified ratios with respect to total indebtedness to gross asset value, total secured indebtedness to gross asset value, aggregate recourse indebtedness to gross asset value, variable rate debt to total indebtedness, debt service coverage and fixed charge coverage; the maintenance of a minimum adjusted tangible net worth; and limitations regarding the amount of cross-collateralized debt. The Credit Agreement includes other customary covenants, including a restriction on distributions and other restricted payments, but permits distributions during any four consecutive fiscal quarters in an aggregate amount of up to 95% of our funds from operations for such period or such amount as may be necessary to maintain our REIT status. The Credit Agreement also permits us to repurchase our Common Stock using up to 80% of sales proceeds in any trailing four-quarter period.

The original aggregate commitment under the Credit Agreement was $750 million, comprised of $450 million of revolving loan commitments and a $300 million term loan tranche. On June 16, 2005, we amended the Credit Agreement to provide for $100.0 million in additional term loan borrowings from a syndicate of financial institutions. The proceeds from the additional term loan were used to repay outstanding revolving loans.

Originally, the revolving loans bore interest at a rate equal to (i) the LIBOR rate plus a margin that could range from 1.50% to 2.00% (for LIBOR loans) or (ii) the base rate (determined by reference to the federal funds rate or Bank of America’s prime rate) plus a margin that could range from 0% to 0.25% (for base rate loans), in each case, depending on our leverage ratio. The original $300 million term loan bore interest at a rate equal to (i) the LIBOR rate plus 2.00% (for LIBOR loans) or (ii) the base rate plus 0.25% (for base rate loans), and the additional $100.0 million term loan bore interest at a rate equal to (i) the LIBOR rate plus 1.75% (for LIBOR loans) or (ii) the base rate plus 0.25%. The default rate of interest for the loan is equal to the applicable rate described above plus 3%. The revolving loans had an original maturity of November 2, 2007, and the term loans of November 2, 2009.

On March 22, 2006, we amended various terms in our Credit Agreement, including: the ability to request an increase in the aggregate commitments (which may be revolving or term loan commitments) by an amount not to exceed $150 million; a reduction in the interest rate spread applicable to revolving loans to LIBOR plus a margin that can range from 1.125% to 1.75%; a reduction in the interest rate spread applicable to letters of credit; a reduction in the spread applicable to term loans to LIBOR plus 1.5%; and an extension of the maturity dates to May 1, 2009 for the revolver and to March 22, 2011 for the term loans.

The lenders under the Credit Agreement may accelerate any outstanding loans if, among other things: we fail to make payments when due (subject to applicable grace periods); material defaults occur under other debt agreements; certain bankruptcy or insolvency events occur; material judgments are entered against us; we fail to comply with certain covenants, such as the requirement to deliver financial information or the requirement to

F-23

provide notices regarding material events (subject to applicable grace periods in some cases); indebtedness is incurred in violation of the covenants; or prohibited liens arise.

At December 31, 2006, the outstanding principal balance of the term loans was $400.0 million at an interest rate of 6.91%. At December 31, 2006, the outstanding principal balance of the revolving loans was $140.0 million at a weighted average interest rate of 6.725% (based on various weighted average LIBOR borrowings outstanding with various maturities). The amount available under the revolving facility at December 31, 2006 was $277.3 million (after giving effect to $32.7 million outstanding for undrawn letters of credit issued under the revolving facility). As of December 31, 2006, we were in compliance with all financial covenant requirements.

Note 8 — Commitments and Contingencies

Commitments

In connection with our redevelopment and capital improvement activities, we have commitments of approximately $146.7 million related to construction projects that are expected to be substantially completed during 2007. We also enter into certain commitments for future purchases of goods and services in connection with the operations of our properties. Those commitments generally have terms of one year or less and reflect expenditure levels comparable to our historical expenditures.

As discussed in Note 5, we have a commitment to fund an additional $14.4 million in second mortgage loans on certain properties in West Harlem, New York City. We also could be required in certain circumstances to acquire the properties for cashand/or assumption of first mortgage debt totaling approximately $139 million to $206 million, in addition to amounts funded and committed under the loan agreement.

In connection with the Casden Transactions, we committed to invest up to $50 million for an interest in Casden Properties LLC. As of December 31, 2006, we had fulfilled our investment commitment. Casden Properties LLC is pursuing development opportunities in Southern California and other markets. We have an option, but not an obligation, to purchase at completion all multifamily rental projects developed by Casden Properties LLC. We also committed to pay an aggregate amount of $50 million to Casden Properties LLC as a retainer on account for redevelopment services, of which $47.5 million had been paid as of December 31, 2006. The final $2.5 million payment was made in January 2007.

Tax Credit Arrangements

We are required to manage certain consolidated real estate partnerships in compliance with various laws, regulations and contractual provisions that apply to our syndication of historic and low-income housing tax credits. In some instances, noncompliance with applicable requirements could result in projected tax benefits not being realized and require a refund or reduction of investor capital contributions, which are reported as deferred income in our consolidated balance sheet. The remaining compliance period for our tax credit syndication arrangements range from less than one year to 15 years. At December 31, 2006, we do not anticipate that any material refunds or reductions of investor capital contributions will be required in connection with these arrangements.

Legal Matters

In addition to the matters described below, we are a party to various legal actions and administrative proceedings arising in the ordinary course of business, some of which are covered by our general liability insurance program, and none of which we expect to have a material adverse effect on our consolidated financial condition or results of operations.

Limited Partnerships

In connection with our acquisitions of interests in real estate partnerships, we are sometimes subject to legal actions, including allegations that such activities may involve breaches of fiduciary duties to the partners of such real estate partnerships or violations of the relevant partnership agreements. We may incur costs in connection with the defense or settlement of such litigation. We believe that we comply with our fiduciary obligations and relevant

F-24

partnership agreements. Although the outcome of any litigation is uncertain, we do not expect any such legal actions to have a material adverse effect on our consolidated financial condition or results of operations.

Environmental

We have determined that our legal obligations to remove or remediate hazardous substances may be conditional asset retirement obligations as defined in FASB Interpretation No. 47,Conditional Asset Retirement Obligations. Except in limited circumstances where the asset retirement activities are expected to be performed in connection with a planned construction project or property casualty, we believe that the fair value of our asset retirement obligations cannot be reasonably estimated due to significant uncertainties in the timing and manner of settlement of those obligations. Asset retirement obligations that are reasonably estimable as of December 31, 2006, are immaterial to our consolidated financial condition and results of operations.

Mold

Unclaimed Property and Use Taxes

Based on inquiries from several states, we are reviewing our historic forfeiture of unclaimed property pursuant to applicable state and local laws. We are also reviewing our historic filing of use tax returns in certain state and local jurisdictions that impose such taxes. Although the outcome is uncertain, we do not expect the effect of any non-compliance to have a material adverse effect on our consolidated financial condition or results of operations.

Insurance Litigation

The previously disclosed litigation brought by WestRM — West Risk Markets, Ltd. (“WestRM”) against XL Reinsurance America, Inc. (“XL”), Greenwich Insurance Company (“Greenwich”) and Lumbermens in which we have been made a third party defendant continues. Summary judgment has been entered against defendants XL and

F-25

Greenwich. The court issued an opinion on the parties’ cross-motions for summary judgment on July 19, 2006, rejecting Greenwich/XL’s motions in their entirety and granting partial summary judgment in favor of us, dismissing the claims for fraud, civil conspiracy, negligent supervision, and aiding and abetting fraud. The court left intact Greenwich/XL’s claims for contractual indemnification, contractual subrogation, and unjust enrichment. Trial has been rescheduled to begin April 10, 2007. We believe that we have meritorious defenses to assert, and we will vigorously defend ourselves against the claims brought against us. In addition, we will vigorously prosecute our own claims. Although the outcome of any claim or matter in litigation is uncertain, we do not believe that we will incur any material loss or that the ultimate outcome of this matter will have a material adverse effect on our consolidated financial condition or results of operations.

FLSA Litigation

The Aimco Operating Partnership and NHP Management Company (“NHPMN”), our subsidiary, are defendants in a lawsuit alleging that they willfully violated the Fair Labor Standards Act (“FLSA”) by failing to pay maintenance workers overtime for time worked in excess of 40 hours per week. The complaint, filed in the United States District Court for the District of Columbia, attempts to bring a collective action under the FLSA and seeks to certify state subclasses in California, Maryland, and the District of Columbia. Specifically, the plaintiffs contend that the Aimco Operating Partnership and NHPMN failed to compensate maintenance workers for time that they were required to be “on-call.” Additionally, the complaint alleges the Aimco Operating Partnership and NHPMN failed to comply with the FLSA in compensating maintenance workers for time that they worked in excess of 40 hours in a week. In June 2005, the court conditionally certified the collective action on both the on-call and overtime issues. Approximately 1,049 individuals opted into the class. The defendants moved to decertify the collective action on both issues and that issue has been fully briefed. The parties anticipate that the court will set the decertification motion for oral argument, but that date has not yet been set. Because the court denied plaintiffs’ motion to certify state subclasses, on September 26, 2005, the plaintiffs filed a class action with the same allegations in the Superior Court of California (Contra Costa County), and on November 5, 2005, in Montgomery County Maryland Circuit Court. The California and Maryland cases have been stayed pending the resolution of the decertification motion in the District of Columbia case. Although the outcome of any litigation is uncertain, we do not believe that the ultimate outcome will have a material adverse effect on our consolidated financial condition or results of operations.

Operating Leases

We are obligated under office space and equipment non-cancelable operating leases. In addition, we sublease certain of our office space to tenants under non-cancelable subleases. Approximate minimum annual rentals under operating leases and approximate minimum payments to be received under annual subleases are as follows (in thousands):


	Operating Lease		Sublease
	Obligations		Receivables

2007	$	8,270	$	1,508
2008		7,621		1,086
2009		6,142		597
2010		5,178		597
2011		3,948		—
Thereafter		8,645		—

Total	$	39,804	$	3,788

Substantially all of the office space and equipment subject to the operating leases described above are for the use of our corporate offices and regional operating centers. Rent expense recognized totaled $8.9 million, $7.4 million, and $5.8 million for the years ended December 31, 2006, 2005 and 2004, respectively. Sublease receipts that offset rent expense totaled approximately $1.3 million, $0.7 million and $0.9 million for the years ended December 31, 2006, 2005 and 2004, respectively.

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Note 9 — Income Taxes

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities of the taxable REIT subsidiaries for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax liabilities and assets are as follows (in thousands):


	2006			2005

Deferred tax liabilities:
Partnership differences	$	47,149		$	53,347
Depreciation		7,729			6,330
Other		85			178

Total deferred tax liabilities	$	54,963		$	59,855

Deferred tax assets:
Net operating, capital and other loss carryforwards	$	20,995		$	34,046
Receivables		5,879			5,856
Accrued liabilities		5,010			6,942
Accrued interest expense		978			6,519
Intangibles — management contracts		8,293			9,880
Tax credit carryforwards		9,878			7,878
Other		1,424			442

Total deferred tax assets		52,457			71,563
Valuation allowance for deferred tax assets		(1,873	)		(1,873	)

Deferred tax assets, net of valuation allowance		50,584			69,690

Net deferred income tax assets (liabilities)	$	(4,379	)	$	9,835

At December 31, 2006 and 2005, we maintained a $1.9 million valuation allowance for deferred tax assets primarily related to previously unrecognized alternative minimum tax credits, some of which were generated by predecessor entities, totaling approximately $1.9 million. During the year ended December 31, 2005, we reversed a $1.2 million valuation allowance for certain low income housing credits and rehabilitation credits based on our determination that it is more likely than not that the credits will be realized. During the year ended December 31, 2005 we identified approximately $12.2 million in previously unidentified net deferred tax assets that were acquired in connection with business combinations in prior years. We recorded adjustments to recognize these net assets and reduce goodwill and real estate acquired in the corresponding business combinations by $6.2 million and $6.0 million, respectively.

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Significant components of the provision (benefit) for income taxes are as follows and are classified within other expenses (income), net in continuing operations and income from discontinued operations, net in our statements of income for 2006, 2005 and 2004 (in thousands):


	2006			2005			2004

Current:
Federal	$	5,380		$	3,412		$	7,345
State		1,272			1,590			748

Total current		6,652			5,002			8,093

Deferred:
Federal		13,197			(17,303	)		634
State		1,698			(1,843	)		72

Total deferred		14,895			(19,146	)		706

Total provision (benefit)	$	21,547		$	(14,144	)	$	8,799

Classification:
Continuing operations	$	(11,448	)	$	(16,353	)	$	(6,825	)
Discontinued operations	$	32,995		$	2,209		$	15,624

Consolidated income (loss) subject to tax, consisting of pretax income of our taxable REIT subsidiaries and gains on certain property sales that are subject to income tax under section 1374 of the Internal Revenue Code, is $53.3 million for 2006, $(36.9) million for 2005, and $20.5 million for 2004. The reconciliation of income tax attributable to continuing and discontinued operations computed at the U.S. statutory rate to income tax expense (benefit) is shown below (dollars in thousands):


	2006						2005						2004
	Amount			Percent			Amount			Percent			Amount		Percent

Tax at U.S. statutory rates on consolidated income (loss)
subject to tax	$	18,639			35.0	%	$	(12,922	)		35.0	%	$	7,174		35.0	%
State income tax, net of Federal tax benefit		3,038			5.7	%		(253	)		0.7	%		818		4.0	%
Effect of permanent differences		(130	)		−0.2	%		(69	)		0.2	%		314		1.5	%
Increase (decrease) in valuation allowance		—			0.0	%		(900	)		2.4	%		493		2.4	%

	$	21,547			40.5	%	$	(14,144	)		38.3	%	$	8,799		42.9	%

Income taxes paid totaled approximately $9.8 million, $4.8 million, and $2.7 million in the years ended December 31, 2006, 2005 and 2004, respectively.

At December 31, 2006, we had net operating loss carryforwards (NOLs) of approximately $53.8 million for income tax purposes that expire in years 2020 to 2025. Subject to certain separate return limitations, we may use these NOLs to offset all or a portion of taxable income generated by our taxable REIT subsidiaries. We used approximately $37.9 million of NOLs during the year ended December 31, 2006, as a result of taxable sales made during the year. Additionally, our low-income housing and rehabilitation tax credit carryforwards remained unchanged as of December 31, 2006, at approximately $6.0 million for income tax purposes that expire in years 2012 to 2025. We had approximately $3.9 million of alternative minimum tax (AMT) credit carryforwards available at December 31, 2006 prior to the valuation allowance. These AMT credit carryforwards do not expire and can be used to offset future regular tax liabilities.

For income tax purposes, dividends paid to holders of Common Stock primarily consist of ordinary income, return of capital, capital gains, qualified dividends and unrecaptured Sec. 1250 gains, or a combination thereof. For

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the years ended December 31, 2006, 2005 and 2004, dividends per share held for the entire year were estimated to be taxable as follows:


	2006(1)					2005(2)					2004
	Amount		Percentage			Amount		Percentage			Amount		Percentage

Ordinary income	$	0.05		2	%	$	0.21		7	%	$	0.04		2	%
Return of capital		—		—			—		—			—		—
Capital gains		1.05		44	%		1.44		48	%		1.77		74	%
Qualified dividends		0.05		2	%		0.24		8	%		0.03		1	%
Unrecaptured Sec.1250 gain		1.25		52	%		1.11		37	%		0.56		23	%

	$	2.40		100	%	$	3.00		100	%	$	2.40		100	%


(1)		On December 19, 2006, our Board of Directors declared a quarterly cash dividend of $0.60 per common share for the quarter ended December 31, 2006, that was paid on January 31, 2007, to stockholders of record on December 31, 2006, which was one month earlier than the typical declaration. Pursuant to certain provisions within the Internal Revenue Code, this dividend was deemed paid by Aimco and received by the shareholders in 2006.

(2)		On December 28, 2005, our Board of Directors declared a quarterly cash dividend of $0.60 per common share for the quarter ended December 31, 2005, that was paid on January 31, 2006, to stockholders of record on December 31, 2005, which was one month earlier than the typical declaration. Pursuant to certain provisions within the Internal Revenue Code, this dividend was deemed paid by Aimco and received by the shareholders in 2005.

Note 10 — Transactions Involving Minority Interest in Aimco Operating Partnership

Preferred OP Units

Various classes of preferred OP Units of the Aimco Operating Partnership are outstanding. Depending on the terms of each class, these preferred OP Units are convertible into common OP Units or redeemable for Common Stock and are paid distributions varying from 5.9% to 9.6% per annum per unit, or equal to the dividends paid on Common Stock based on the conversion terms. As of December 31, 2006, a total of 3.3 million preferred OP Units were outstanding with a redemption value of $89.2 million, which were redeemable into approximately 1.6 million shares of Common Stock. As of December 31, 2005, a total of 3.3 million preferred OP Units were outstanding with a redemption value of $90.2 million, which were redeemable into approximately 2.4 million shares of Common Stock.

During the years ended December 31, 2006 and 2005, approximately 7,600 and 1,700 preferred OP Units were tendered for redemption in exchange for approximately 3,500 and 1,100 shares of Common Stock, respectively. During the years ended December 31, 2006 and 2005, there were approximately 31,100 and 12,800 preferred OP Units tendered for redemption in exchange for cash, respectively.

Common OP Units

We completed tender offers for limited partnership interests resulting in the issuance of approximately 300 and 3,000 common OP Units in 2006 and 2005, respectively.

During the years ended December 31, 2006 and 2005, approximately 110,000 and 77,000 common OP Units, respectively, were redeemed in exchange for cash, and approximately 94,000 and 425,000 common OP Units, respectively, were redeemed in exchange for shares of Common Stock.

High Performance Units

From 1998 through 2005, the Aimco Operating Partnership issued various classes of High Performance Units, or HPUs, as follows: 1998 — Class I HPUs; 2001 — Class II HPUs, Class III HPUs, and Class IV HPUs; 2002 — Class V HPUs; 2003 — Class VI HPUs; 2004 — Class VII HPUs; 2005 — Class VIII HPUs; and 2006 — Class IX

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HPUs. These HPUs were issued to limited liability companies owned by certain members of our senior management (and independent directors in the case of Class I HPUs, only) in exchange for cash in amounts that we determined, with the assistance of a nationally recognized independent valuation expert, to be the fair value of the HPUs. The terms of the HPUs provide for the issuance, following a measurement period of generally three years (one year in the case of Class II HPUs and two years in the case of Class III HPUs), of an increased number of HPUs depending on the degree, if any, to which certain financial performance benchmarks are achieved over the applicable measurement period. The holders of HPUs at the conclusion of the measurement period receive the same amount of distributions that are paid to holders of an equivalent number of the Aimco Operating Partnership’s outstanding common OP Units. Prior to the end of the measurement period, the limited liability company holders of HPUs receive only nominal distributions. If the specified minimum benchmarks are not achieved at the conclusion of the applicable measurement period, the HPUs have only nominal value and may be reacquired by the Aimco Operating Partnership for a nominal amount.

The following table sets forth information for HPUs outstanding as of December 31, 2006:

Gross

End of

Outstanding Units

Year of

Proceeds

Measurement

at December 31,

Class of HPUs

Issuance

(thousands)

Period

2006

Class I

1998

2,070

12/31/2000

2,379,084

Class VII

2004

752

12/31/2006

4,109

Class VIII

2005

780

12/31/2007

5,000

Class IX

2006

875

12/31/2008

5,000

The minimum performance benchmarks were not achieved for HPU Classes II, III, IV, V, VI and VII. Accordingly, those HPUs had only nominal value at the conclusion of the related measurement period and, except for the Class VII HPUs, were reacquired by the Aimco Operating Partnership and cancelled. At December 31, 2006, performance benchmarks for the Class VIII HPUs and Class IX HPUs had been achieved that would have resulted in the issuance of the equivalent of approximately 881,000 common OP Units if the related measurement periods had ended on that date.

In determining the value of the historical High Performance Units, we used a discounted cash flow valuation methodology supported by a nationally recognized independent valuation expert. This discounted cash flow methodology used a 24% discount rate applied to probability-adjusted cash flows reflecting possible distribution outcomes. Using that methodology, we determined the fair value of High Performance Units as follows: Class V HPUs $1,066,000, Class VI HPUs $985,000, Class VII HPUs $915,000, Class VIII HPUs $780,000 and Class IX HPUs $875,000. We have evaluated an alternative methodology that (1) assumes an investor receives shares of Aimco common stock in the event that the performance hurdles are met at the end of the measurement period, (2) uses a discount rate for the three year measurement period of approximately 30%, and (3) applies a liquidity discount of 25% to reflect that the High Performance Units are illiquid securities absent a change of control of Aimco. Applying this alternative methodology results in an effectively lower net discount rate than the rate used in the discounted cash flow methodology and, as a result, the value of those High Performance Units would have been as follows: Class V HPUs $1,696,000, Class VI HPUs $1,496,000, Class VII HPUs $1,867,000, Class VIII HPUs $1,772,000 and Class IX HPUs $2,042,000. Using the alternative methodology resulted in a higher valuation than the discounted cash flow methodology based on the use of assumed common stock prices in conjunction with the discount rate and liquidity discount discussed above. Accordingly, after taking into account the percentage of each program subscribed and the unamortized portion of the Class VIII and Class IX HPUs, we recorded a cumulative adjustment of $2.9 million in the year ended December 31, 2006, to reflect the difference between these two methodologies. The $2.9 million correction is also due to a change in the assumptions of the discount rates used to value HPU V through HPU IX.

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Note 11 — Stockholders’ Equity

Preferred Stock

At December 31, 2006 and 2005, we had the following classes of preferred stock outstanding:


								Balance
					Annual Dividend			December 31,
	Redemption		Conversion		Rate Per Share			2006		2005
Perpetual	Date(1)		Price		(paid quarterly)			(thousands)		(thousands)

Class G Cumulative Preferred Stock, $0.01 par value, 4,050,000 shares authorized, 4,050,000 shares issued and outstanding		07/15/2008		—		9.3750	%	$	101,000	$	101,000
Class Q Cumulative Preferred Stock, $0.01 par value, 2,530,000 shares authorized, zero and 2,530,000 shares issued and outstanding(2)		03/19/2006		—		10.100	%		—		63,250
Class R Cumulative Preferred Stock, $0.01 par value, 6,940,000 shares authorized, zero and 6,940,000 shares issued and outstanding(3)		07/20/2006		—		10.000	%		—		173,500
Class T Cumulative Preferred Stock, $0.01 par value, 6,000,000 shares authorized, 6,000,000 shares issued and outstanding		07/31/2008		—		8.000	%		150,000		150,000
Class U Cumulative Preferred Stock, $0.01 par value, 8,000,000 shares authorized, 8,000,000 shares issued and outstanding		03/24/2009		—		7.750	%		200,000		200,000
Class V Cumulative Preferred Stock, $0.01 par value, 3,450,000 shares authorized, 3,450,000 shares issued and outstanding		09/29/2009		—		8.000	%		86,250		86,250
Class Y Cumulative Preferred Stock, $0.01 par value, 3,450,000 shares authorized, 3,450,000 shares issued and outstanding		12/21/2009		—		7.875	%		86,250		86,250
Series A Community Reinvestment Act Preferred Stock, $0.01 par value per share, 240 shares authorized, 200 shares issued and outstanding(6)		06/30/2011		—		(6	)		100,000		—

									723,500		860,250

Convertible(5):
Class W Cumulative Convertible Preferred Stock, $0.01 par value, 1,904,762 shares authorized, 1,904,762 shares issued and outstanding		09/30/2007	$	52.50		8.100	%		100,000		100,000
Class X Cumulative Convertible Preferred Stock, $0.01 par value, 2,000,000 shares authorized, zero and 2,000,000 shares issued and outstanding(4)		03/31/2006	$	52.50		8.500	%		—		50,000

									100,000		150,000

Total								$	823,500	$	1,010,250

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(1)		All classes of preferred stock are redeemable at our option on and after the dates specified.

(2)		On March 19, 2006, we redeemed for cash all 2.53 million shares outstanding of the 10.1% Class Q Cumulative Preferred Stock, or the Class Q Preferred Stock, for a total redemption price of $25.035 per share, which included a redemption price of $25.0 per share and $0.035 per share of accumulated and unpaid dividends through March 19, 2006. This redemption resulted in $2.5 million of related preferred stock issuance costs being deducted in determining net income attributable to common stockholders.

(3)		On July 20, 2006, we redeemed for cash all 6.94 million shares outstanding of the 10% Class R Cumulative Preferred Stock, or the Class R Preferred Stock, for a total redemption price of $25.243 per share, which included a redemption price of $25.00 per share and $0.243 per share of accumulated and unpaid dividends through July 20, 2006. This redemption resulted in $4.3 million of related preferred stock issuance costs being deducted in determining net income attributable to common stockholders.

(4)		On March 31, 2006, we redeemed for cash all 2.00 million shares outstanding of the 8.5% Class X Cumulative Preferred Stock, or the Class X Preferred Stock, for a total redemption price of $25.531 per share, which included a redemption price of $25.00 per share and $0.531 per share of accumulated and unpaid dividends through March 31, 2006. The conversion price was $52.50 (equivalent to a conversion rate of 0.476 shares of Common Stock for each share of Class X Preferred Stock.) This redemption resulted in $0.1 million of related preferred stock issuance costs being deducted in determining net income attributable to common stockholders.

(5)		The Articles Supplementary set forth the relative rights and preferences of each class of securities and as shown above, the dividend rate on each class of convertible securities is the rate specified in the articles supplementary for each class. Such rate can be increased to the rate of the dividends paid on the number of shares of Common Stock into which a share of such preferred security is convertible. The initial conversion price of each class was in excess of the fair market value of a share of Common Stock on the respective dates on which the purchasers of each class agreed to purchase such securities.

(6)		On June 29, 2006, we sold 200 shares of our Series A Community Reinvestment Act Perpetual Preferred Stock, $0.01 par value per share, or the CRA Preferred Stock, with a liquidation preference of $500,000 per share, for net proceeds of $97.5 million. For the period from June 29, 2006, the date of original issuance, through March 31, 2015, the dividend rate is a variable rate per annum equal to the Three-Month LIBOR Rate (as defined in the articles supplementary designating the CRA Preferred Stock) plus 1.25%, calculated as of the beginning of each quarterly dividend period. The rate at December 31, 2006 was 6.62%. Upon liquidation, holders of the CRA Preferred Stock are entitled to a preference of $500,000 per share, plus an amount equal to accumulated, accrued and unpaid dividends, whether or not earned or declared. The CRA Preferred Stock ranks prior to our Common Stock and on the same level as our outstanding shares of preferred stock, with respect to the payment of dividends and the distribution of amounts upon liquidation, dissolution or winding up. The CRA Preferred Stock is not redeemable prior to June 30, 2011, except in limited circumstances related to REIT qualification. On and after June 30, 2011, the CRA Preferred Stock is redeemable for cash, in whole or from time to time in part, at our option, at a price per share equal to the liquidation preference, plus accumulated, accrued and unpaid dividends, if any, to the redemption date.

All classes of preferred stock are pari passu with each other and are senior to Common Stock. The holders of each class of preferred stock are generally not entitled to vote on matters submitted to stockholders. Dividends on all shares of preferred stock are subject to declaration by our Board of Directors. All of the above outstanding classes of preferred stock have a liquidation preference per share of $25, with the exceptions of the 8.1% Class W Cumulative Convertible Preferred Stock, which has a liquidation preference per share of $52.50 and the CRA Preferred Stock, which has a liquidation preference per share of $500,000.

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The dividends paid on each class of preferred stock classified as equity in the years ended December 31, 2006, 2005, and 2004 are as follows (in thousands, except per share data):


	2006					2005					2004
	Amount			Total		Amount			Total		Amount			Total
	Per			Amount		Per			Amount		Per			Amount
Class of Preferred Stock	Share(1)			Paid		Share(1)			Paid		Share(1)			Paid

Perpetual:
Class D	$	—		$	—	$	0.59	(2)		736	$	4.87	(3)	$	6,090
Class G		2.34			9,492		2.34			9,492		2.34			9,492
Class Q		0.67	(4)		1,686		2.53			6,388		2.53			6,388
Class R		1.49	(4)		10,361		2.50			17,350		2.50			17,350
Class T		2.00			12,000		2.00			12,000		2.00			12,000
Class U		1.94			15,500		1.94			15,500		1.08	(5)		8,655
Class V		2.00			6,900		2.09	(6)		7,207		—			—
Class Y		1.97			6,792		1.61	(7)		5,547		—			—
Series A CRA		8,720	(8)		1,744		—			—		—			—

					64,475					74,220					59,975

Convertible:
Class N		—			—		—			—		2.59	(9)		10,361
Class O		—			—		—			—		4.73	(9)		9,000
Class P		—			—		—			—		1.16	(9)		4,648
Class W		4.25			8,100		4.25	(10)		8,100		—			—
Class X		1.06	(4)		2,125		2.13	(10)		4,262		—			—

					10,225					12,362					24,009

Total				$	74,700				$	86,582				$	83,984


(1)		Amounts per share are calculated based on the number of preferred shares outstanding either at the end of each year or as of conversion or redemption date, as noted.

(2)		For the period from January 1, 2005 to the date of redemption.

(3)		Total amount paid includes dividends paid on 2.7 million shares of Class D Preferred Stock until November 5, 2004, when 1.5 million shares were redeemed for cash.

(4)		For the period from January 1, 2006 to the date of redemption.

(5)		For the period from March 24, 2004 (date of issuance) to December 31, 2004.

(6)		For the period from September 29, 2004 (date of issuance) to December 31, 2005.

(7)		For the period from December 21, 2004 (date of issuance) to December 31, 2005.

(8)		For the period from June 29, 2006 (date of issuance) to December 31, 2006.

(9)		For the period from January 1, 2004 to the date of redemption. For Class N Preferred Stock, includes a 2%, or $0.50 redemption premium per share, on 2.0 million shares.

(10)		For the period from September 30, 2004 (date of issuance) to December 31, 2005.

Common Stock

During 2006 and 2005, we issued approximately 26,000 shares and 37,000 shares, respectively, of Common Stock to certain non-executive officers who purchased the shares at market prices. In exchange for the shares purchased, the officers executed notes payable totaling $1.1 million and $1.4 million, respectively. These notes, which are 25% recourse to the borrowers, have a10-year maturity and bear interest either at a fixed rate of 6% annually or a floating rate based on the one-month LIBOR plus 3.85%, which is subject to an annual interest rate cap

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of typically 7.25%. Total payments in 2006 and 2005 on all notes from officers were $21.8 million and $12.3 million, respectively. In 2006, we reacquired approximately 10,000 shares of Common Stock from officers in exchange for the cancellation of related notes totaling $0.5 million.

In addition, in 2006 and 2005, we issued approximately 592,000 and 393,000 restricted shares of Common Stock, respectively, to certain officers and employees. The restricted stock was recorded at the fair market value of the Common Stock on the date of issuance. These shares of restricted Common Stock may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of and are subject to a risk of forfeiture prior to the expiration of the applicable vesting period (typically ratably over a period of three to five years). Certain shares of restricted stock issued during 2005 are subject to accelerated vesting upon the achievement of a specified calendar year performance measure target. As of December 31, 2006, achievement of the specified target is not considered probable.

In 2006, we purchased on the open market approximately 2.3 million shares of Common Stock, respectively, at an average price per share of approximately $52.25. In 2005, we did not repurchase any shares of Common Stock. In 2004, we purchased 110,000 shares of Common Stock on the open market at an average price per share of approximately $31.97 and purchased 287,272 shares of Common Stock in a privately negotiated transaction at a price of $31.60 per share.

Stock Warrants

On December 2, 1997, we issued warrants, which we refer to as the Oxford Warrants, exercisable through December 31, 2006, to purchase up to an aggregate of 500,000 shares of Common Stock at $41 per share. The Oxford Warrants were issued to affiliates of Oxford Realty Financial Group, Inc., a Maryland corporation, or Oxford, in connection with the amendment of certain agreements pursuant to which we manage properties formerly controlled by Oxford or its affiliates. During the year ended December 31, 2005, we purchased from the holders thereof all outstanding Oxford Warrants for an aggregate purchase price of $1.05 million, which was determined to be fair value.

Registration Statements

As of December 31, 2006, under our shelf registration statement, which was declared effective in April 2004, we had available for issuance approximately $876.6 million of debt and equity securities, and the Aimco Operating Partnership had available for issuance $500.0 million of debt securities.

Note 12 — Share-Based Compensation and Employee Benefit Plans

Stock Award and Incentive Plan

We adopted the Apartment Investment and Management Company 1997 Stock Award and Incentive Plan, or the 1997 Plan, to attract and retain officers, key employees and independent directors. The 1997 Plan reserves for issuance a maximum of 20 million shares, which may be in the form of incentive stock options, non-qualified stock options and restricted stock, or other types of awards as authorized under the 1997 Plan. At December 31, 2006, there were approximately 3.4 million shares available to be granted. The 1997 Plan is administered by the Compensation and Human Resources Committee of the Board of Directors. In the case of incentive stock options, the exercise price of the options granted may not be less than the fair market value of Common Stock at the date of grant. The term of the incentive and non-qualified options is generally ten years from the date of grant. The options typically vest over a period of one to five years from the date of grant. We generally issue new shares upon exercise of options. Restricted stock awards typically vest over a period of three to five years.

Prior to 2006, we applied the accounting provisions of Statement of Financial Accounting Standards No. 123,Accounting for Stock-Based Compensation,or SFAS 123, as amended by Statement of Financial Accounting Standards No. 148,Accounting for Stock-Based Compensation — Transition and Disclosure — an amendment of FASB Statement No. 123,or SFAS 148, to all employee awards granted, modified, or settled on or after January 1, 2003, which resulted in recognition of compensation expense related to stock options based on the fair value of the stock options. For stock options granted prior to January 1, 2003, we applied Accounting Principles Board Opinion

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No. 25,Accounting for Stock Issued to Employees, or APB 25, and related interpretations. Under APB 25, because the exercise price of our employee stock options equaled the market price of the underlying stock on the date of grant, no compensation expense related to such options was recognized. We recognized compensation expense for stock options accounted for under SFAS 123 and restricted stock awards ratably over the period the awards vested. Compensation cost was reversed as forfeitures occurred.

Effective January 1, 2006, we adopted Statement of Financial Accounting Standards No. 123 (revised 2004),Share-Based Payment, or SFAS 123R, which superseded SFAS 123. SFAS 123R requires all share-based employee compensation, including grants of employee stock options, to be recognized in the financial statements based on fair value and provides for a modified prospective application method of adoption. Under this method, we are applying the provisions of SFAS 123R prospectively to new awards granted on or after January 1, 2006, and to existing awards that are modified after January 1, 2006, and are recognizing compensation cost over the remaining vesting period for the unvested portion of all outstanding awards granted prior to 2006. The measurement and recognition provisions of SFAS 123R that apply to our stock compensation arrangements are similar to those that we applied under SFAS 123 to awards granted on or after January 1, 2003. Under SFAS 123R, we continue to recognize the cost of stock-based compensation ratably over the vesting period. The primary change in our method of recognizing compensation cost relates to the treatment of forfeitures. Under SFAS 123R, expected forfeitures are required to be estimated in determining periodic compensation cost, whereas under SFAS 123 we recognized forfeitures as they occurred.

In connection with the adoption of SFAS 123R as of January 1, 2006, we estimated that forfeitures of unvested awards of stock options and restricted stock for which compensation expense was recognized prior to 2006 will total approximately $154,000. SFAS 123R provides that a cumulative effect of change in accounting principle be recognized for such estimated forfeitures as of the date of adoption. We believe the estimated forfeitures upon adoption of SFAS 123R are immaterial and have reported the cumulative effect adjustment in our general and administrative expenses for the year ended December 31, 2006. The adoption of SFAS 123R resulted in decreases of $1.2 million in 2006 income from continuing operations and net income and decreases of $0.01 in 2006 basic and diluted earnings per share. The adoption of SFAS 123R did not have a material effect on 2006 cash flows from operating or financing activities. After 2006, SFAS 123R is not expected to have any significant effect on our financial statements other than the timing of recognition of forfeitures.

We estimated the fair value of our options using a Black-Scholes closed-form valuation model using the assumptions set forth in the table below. For options granted in 2006, the expected term of the options reflects the average of the vesting period and the contractual term for the options. Expected volatility reflects the historical volatility of our Common Stock during the historical period commensurate with the expected term of the options that ended on the date of grant. The expected dividend yield reflects the actual amount per share paid on our Common Stock after 2003 and the risk-free interest rate reflects the annualized yield of a zero coupon U.S. Treasury security with a term equal to the expected term of the option. The weighted average fair value of options and our valuation assumptions for the years ended December 31, 2006, 2005 and 2004 were as follows:


	2006			2005			2004

Weighted average grant-date fair value		$5.23			$3.57			$2.24
Assumptions:
Risk-free interest rate		4.58	%		4.10	%		3.50	%
Expected dividend yield		5.58	%		6.31	%		7.50	%
Expected volatility		20.15	%		19.00	%		19.10	%
Weighted average expected life of options		6.5 years			5.0 years			5.0 years

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The following table summarizes activity for our outstanding stock options for the years ended December 31, 2006, 2005 and 2004 (numbers of options in thousands):


	2006					2005					2004
				Weighted					Weighted					Weighted
				Average					Average					Average
	Number			Exercise		Number			Exercise		Number			Exercise
	of Options			Price		of Options			Price		of Options			Price

Outstanding at beginning of year		11,054		$	38.78		10,838		$	38.87		10,107		$	39.59
Granted		692			43.15		383			38.14		1,219			32.19
Exercised		(2,826	)		38.03		(65	)		38.22		(69	)		29.11
Forfeited		(322	)		38.09		(102	)		39.98		(419	)		37.81

Outstanding at end of year		8,598		$	39.36		11,054		$	38.78		10,838		$	38.87
Exercisable at end of year		6,508		$	39.56		8,177		$	39.30		7,132		$	39.47

The intrinsic value of a stock option represents the amount by which the fair value of the underlying stock exceeds the exercise price of the option. Options outstanding at December 31, 2006, had an aggregated intrinsic value of $143.1 million and a weighted average remaining contractual term of 4.6 years. Options exercisable at December 31, 2006 had an aggregate intrinsic value of $107.2 million and a weighted average remaining contractual term of 3.7 years. The intrinsic value of stock options exercised during the years ended December 31, 2006, 2005 and 2004 was $34.9 million, $0.2 million and $0.2 million, respectively. We may realize tax benefits in connection with the exercise of options by employees of our taxable subsidiaries. We realized tax benefits of approximately $1.0 million for the year ended December 31, 2006.

The following table summarizes activity for restricted stock awards for the years ended December 31, 2006, 2005 and 2004 (numbers of shares in thousands):


	2006					2005					2004
				Weighted					Weighted					Weighted
				Average					Average					Average
	Number			Grant-Date		Number			Grant-Date		Number			Grant-Date
	of Shares			Fair Value		of Shares			Fair Value		of Shares			Fair Value

Unvested at beginning of year		882		$	35.08		775		$	32.86		411		$	41.33
Granted		607			44.47		429			38.50		566			29.89
Vested		(240	)		35.80		(254	)		33.91		(109	)		32.73
Forfeited		(161	)		35.41		(68	)		35.70		(93	)		41.33

Unvested at end of year		1,088		$	40.11		882		$	35.08		775		$	32.86

The aggregate fair value of shares that vested during the years ended December 31, 2006, 2005 and 2004 was $12.1 million, $8.3 million and $3.1 million, respectively.

Total compensation cost recognized for restricted stock and stock option awards was $15.9 million, $10.0 million and $6.5 million for the years ended December 31, 2006, 2005 and 2004, respectively. Of these amounts, $3.6 million $1.4 million and $1.2 million, respectively, were capitalized. At December 31, 2006, total unvested compensation cost not yet recognized was $33.9 million. We expect to recognize this compensation over a weighted average period of approximately 2.1 years. Certain awards of restricted stock and options granted in 2005 and 2006 are subject to immediate vesting based on achievement of a specified annual financial performance target during the scheduled vesting period. Recognition of related compensation cost may be accelerated based on our ongoing assessment of whether the performance target is probable of being achieved. At this time, we do not believe that achievement of the performance target is probable.

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The following table illustrates the pro forma effect on net income and earnings per share if the fair value based method under SFAS 123 had been applied to all outstanding and unvested awards for the years ended December 31, 2005 and 2004 (in thousands, except per share data):


	2005			2004

Net income (loss) attributable to common stockholders, as reported	$	(16,966	)	$	174,693
Add stock-based employee compensation expense included in reported net income:
Restricted stock awards		8,140			4,903
Stock options		1,835			1,603
Deduct total stock-based employee compensation expense determined under fair value based method for all awards:
Restricted stock awards		(8,140	)		(4,903	)
Stock options		(3,422	)		(4,289	)
Add minority interest in Aimco Operating Partnership		161			276

Pro forma net income (loss) attributable to common stockholders	$	(18,392	)	$	172,283

Basic earnings (loss) per common share:
Reported	$	(0.18	)	$	1.88
Pro forma	$	(0.20	)	$	1.85
Diluted earnings (loss) per common share:
Reported	$	(0.18	)	$	1.88
Pro forma	$	(0.20	)	$	1.85

Employee Stock Purchase Plan

We adopted an employee stock purchase plan effective September 1, 2006. Under the terms of this plan, eligible employees may authorize payroll deductions up to 15% of their base compensation to purchase shares of our Common Stock at a five percent discount from its fair value on the last day of the calendar quarter during which payroll deductions are made. In 2006, 648 shares were purchased under this plan at a price of $53.06. No compensation cost is recognized in connection with this plan.

401K Plan

We provide a 401(k) defined-contribution employee savings plan. Employees who have completed 30 days of service and are age 18 or older are eligible to participate. Our matching contributions are made in the following manner: (1) a 100% match on the first 3% of the participant’s contribution; (2) a 50% match on the next 2% of the participant’s contribution. We incurred costs in connection with this plan of approximately $4.5 million, $4.1 million and $3.2 million in 2006, 2005 and 2004, respectively.

Note 13 — Discontinued Operations and Assets Held for Sale

In accordance with SFAS 144 we report as discontinued operations real estate assets that meet the definition of a component of an entity and have been sold or meet the criteria to be classified as held for sale under SFAS 144. We included all results of these discontinued operations, less applicable income taxes, in a separate component of income on the consolidated statements of income under the heading “discontinued operations.” This treatment resulted in certain reclassifications of 2005 and 2004 financial statement amounts.

At December 31, 2006, we had no properties classified as held for sale. During the year ended December 31, 2006, we sold 77 properties with an aggregate of 17,307 units. Additionally, on February 17, 2006, we closed the sale of a portion of the Flamingo South Beach property known as the South Tower with an aggregate of 562 units. For the years ended December 31, 2006, 2005, and 2004, discontinued operations includes the results of operations of these 77 properties and the South Tower for periods prior to the date of sale. During 2005, we sold 83 properties with an aggregate of 16,835 units. For the years ended December 31, 2005 and 2004, discontinued operations

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include the results of operations of these 83 properties for periods prior to the date of sale. During 2004, we sold 54 properties with an aggregate of 12,248 units. For the year ended December 31, 2004, discontinued operations includes the results of operations of these 54 properties for periods prior to the date of sale.

The following is a summary of the components of income from discontinued operations for the years ended December 31, 2006, 2005, and 2004 (dollars in thousands):


	2006			2005			2004

Rental and other property revenues	$	77,851		$	212,390		$	296,670
Property operating expenses		(40,175	)		(112,151	)		(150,061	)
Depreciation and amortization		(20,101	)		(58,634	)		(67,277	)
Other (expenses) income, net		(5,976	)		(3,218	)		(5,163	)

Operating income		11,599			38,387			74,169
Interest income		798			742			522
Interest expense		(15,957	)		(46,654	)		(71,404	)
Minority interest in consolidated real estate partnerships		2,753			2,992			2,160

Income (loss) from operations		(807	)		(4,533	)		5,447
Gain on dispositions of real estate, net of minority partners’ interest		260,206			102,972			249,354
Impairment (losses) recoveries on real estate assets sold or held for sale		434			(3,836	)		(7,289	)
Recovery of deficit distributions to minority partners		15,927			14,604			3,230
Income tax arising from disposals		(32,918	)		(4,481	)		(16,015	)
Minority interest in Aimco Operating Partnership		(23,381	)		(10,621	)		(25,058	)

Income from discontinued operations	$	219,461		$	94,105		$	209,669

Gain on disposition of real estate is reported net of incremental direct costs incurred in connection with the transaction, including any prepayment penalties incurred upon repayment of mortgage loans collateralized by the property being sold. Such prepayment penalties totaled $53.8 million, $25.3 million and $31.1 million for the years ended December 31, 2006, 2005 and 2004, respectively.

We are currently marketing for sale certain real estate properties that are inconsistent with our long-term investment strategy and evaluate whether such properties meet the criteria to be classified as held for sale. As of December 31, 2006, none of our properties meet such criteria. We expect that all properties classified as held for sale will sell within one year from the date classified as held for sale. Assets held for sale of $622.3 million at December 31, 2005 include real estate net book value of $615.5 million, represented by 66 properties and the South Tower with 16,414 units that were classified as assets held for sale during 2005 and 2006. Liabilities related to assets classified as held for sale of $392.8 million at December 31, 2005 include mortgage debt of $384.3 million. Net recoveries of impairment losses for the year ended December 31, 2006 were $0.4 million. Impairment losses recorded for the years ended December 31, 2005 and 2004 were $3.8 million and $7.3 million, respectively.

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Note 14 — Earnings per Share

We calculate earnings per share based on the weighted average number of shares of Common Stock, common stock equivalents and dilutive convertible securities outstanding during the period. The following table illustrates the calculation of basic and diluted earnings per share for the years ended December 31, 2006, 2005 and 2004 (in thousands, except per share data):


	2006			2005			2004

Numerator:
Income (loss) from continuing operations	$	(42,674	)	$	(23,123	)	$	57,785
Less net income attributable to preferred stockholders		(81,132	)		(87,948	)		(88,804	)

Numerator for basic and diluted earnings per share — Loss from continuing operations	$	(123,806	)	$	(111,071	)	$	(31,019	)

Income from discontinued operations	$	219,461		$	94,105		$	209,669

Cumulative effect of change in accounting principle	$	—		$	—		$	(3,957	)

Net income	$	176,787		$	70,982		$	263,497
Less net income attributable to preferred stockholders		(81,132	)		(87,948	)		(88,804	)

Numerator for basic and diluted earnings per share — Net income (loss) attributable to common stockholders	$	95,655		$	(16,966	)	$	174,693

Denominator:
Denominator for basic earnings per share — weighted average number of shares of Common Stock outstanding		95,758			93,894			93,118
Effect of dilutive securities:
Dilutive potential common shares		—			—			—

Denominator for diluted earnings per share		95,758			93,894			93,118

Earnings (loss) per common share:
Basic earnings (loss) per common share:
Loss from continuing operations (net of income attributable to preferred stockholders)	$	(1.29	)	$	(1.18	)	$	(0.33	)
Income from discontinued operations		2.29			1.00			2.25
Cumulative effect of change in accounting principle		—			—			(0.04	)

Net income (loss) attributable to common stockholders	$	1.00		$	(0.18	)	$	1.88

Diluted earnings (loss) per common share:
Loss from continuing operations (net of income attributable to preferred stockholders)	$	(1.29	)	$	(1.18	)	$	(0.33	)
Income from discontinued operations		2.29			1.00			2.25
Cumulative effect of change in accounting principle		—			—			(0.04	)

Net income (loss) attributable to common stockholders	$	1.00		$	(0.18	)	$	1.88

The Class W Cumulative Convertible Preferred Stock is convertible into Common Stock (see Note 11) and is anti-dilutive on an “if converted” basis. Therefore, we deduct all of the dividends on the convertible preferred stock to arrive at the numerator and no additional shares are included in the denominator when calculating basic and diluted earnings per common share. We have excluded from diluted earnings per share the common share equivalents related to approximately 10.8 million, 12.6 million and 12.4 million of vested and unvested stock options, shares issued for non-recourse notes receivable, and unvested restricted stock awards for the years ended December 31, 2006, 2005 and 2004, respectively, because their effect would be anti-dilutive. We consider the Aimco Operating Partnership’s High Performance Partnership Units for which the applicable measurement period

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has not ended to be potential Common Stock equivalents, but have excluded them from diluted earnings per share because their effect would be anti-dilutive.

Note 15 — Unaudited Summarized Consolidated Quarterly Information

Summarized unaudited consolidated quarterly information for 2006 and 2005 is provided below (amounts in thousands, except per share amounts).


	Quarter(1)
2006	First			Second			Third			Fourth

Total revenues	$	408,504		$	419,971		$	423,931		$	438,588
Total operating expenses		(324,070	)		(327,446	)		(338,730	)		(363,595	)
Operating income		84,434			92,525			85,201			74,993
Income (loss) from continuing operations		5,508			(3,554	)		(36,451	)		(8,177	)
Income from discontinued operations, net		78,563			38,646			11,576			90,676
Net income (loss)		84,071			35,092			(24,875	)		82,499
Earnings (loss) per common share — basic:
Loss from continuing operations (net of income attributable to preferred stockholders)	$	(0.19	)	$	(0.24	)	$	(0.60	)	$	(0.26	)
Net income (loss) attributable to common stockholders	$	0.63		$	0.17		$	(0.48	)	$	0.69
Earnings (loss) per common share — diluted:
Loss from continuing operations (net of income attributable to preferred stockholders)	$	(0.19	)	$	(0.24	)	$	(0.60	)	$	(0.26	)
Net income (loss) attributable to common stockholders	$	0.63		$	0.17		$	(0.48	)	$	0.69
Weighted average common shares outstanding		95,183			96,071			96,061			95,715
Weighted average common shares and common share equivalents outstanding		95,183			96,071			96,061			95,715

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	Quarter(1)
2005	First			Second			Third			Fourth

Total revenues	$	334,996		$	344,125		$	357,999		$	371,344
Total operating expenses		(266,288	)		(269,982	)		(291,769	)		(301,037	)
Operating income		68,708			74,143			66,230			70,307
Income (loss) from continuing operations		(862	)		1,033			(6,521	)		(16,773	)
Income from discontinued operations, net		2,894			26,533			32,872			31,806
Net income		2,032			27,566			26,351			15,033
Earnings (loss) per common share — basic:
Loss from continuing operations (net of income attributable to preferred stockholders)	$	(0.25	)	$	(0.22	)	$	(0.30	)	$	(0.41	)
Net income (loss) attributable to common stockholders	$	(0.22	)	$	(0.06	)	$	(0.05	)	$	(0.07	)
Earnings (loss) per common share — diluted:
Loss from continuing operations (net of income attributable to preferred stockholders)	$	(0.25	)	$	(0.22	)	$	(0.30	)	$	(0.41	)
Net income (loss) attributable to common stockholders	$	(0.22	)	$	(0.06	)	$	(0.05	)	$	(0.07	)
Weighted average common shares outstanding		93,448			93,807			94,041			94,282
Weighted average common shares and common share equivalents outstanding		93,448			93,807			94,041			94,282


(1)		Certain reclassifications have been made to 2006 and 2005 quarterly amounts to conform to the full year 2006 presentation, primarily related to treatment of discontinued operations.

Note 16 — Business Segments

We have two reportable segments: real estate (owning and operating apartments) and investment management business (providing property management and other services relating to the apartment business to third parties and affiliates). We own and operate properties throughout the United States and Puerto Rico that generate rental and other property related income through the leasing of apartment units to a diverse base of residents. We separately evaluate the performance of each of our properties. However, because each of our properties has similar economic characteristics, the properties have been aggregated into a single apartment communities, or real estate, segment. All real estate revenues are from external customers and no revenues are generated from transactions with other segments. No single resident or related group of residents contributed 10% or more of total revenues during the years ended December 31, 2006, 2005 or 2004.

Statement of Financial Accounting Standards No. 131,Disclosures about Segments of an Enterprise and Related Information, or SFAS 131, requires that segment disclosures present the measure(s) used by the chief operating decision maker for purposes of assessing such segments’ performance. Our chief operating decision maker is comprised of several members of our executive management team who use several generally accepted industry financial measures to assess the performance of the business including net operating income, free cash flow, funds from operations, and adjusted funds from operations. The chief operating decision maker emphasizes net operating income as a key measurement of segment profit or loss. Accordingly, below we disclose net operating income for each of our segments. Net operating income is defined as segment revenues (after the elimination of intersegment revenues) less direct segment operating expenses. Certain reclassifications have been made to 2005 and 2004 amounts to conform to the 2006 presentation. These reclassifications primarily represent presentation changes related to discontinued operations.

F-41

The following table presents revenues and net operating income for the years ended December 31, 2006, 2005 and 2004, from these segments, and reconciles net operating income of reportable segments to operating income as reported (in thousands):


	2006			2005			2004

Revenues:
Real estate segment	$	1,629,988		$	1,346,587		$	1,211,865
Investment management segment:
Gross revenues		157,165			141,649			144,075
Elimination of intersegment revenues		(96,159	)		(79,772	)		(76,735	)

Net revenues after elimination		61,006			61,877			67,340

Total revenues of reportable segments	$	1,690,994		$	1,408,464		$	1,279,205

Net operating income:
Real estate segment	$	871,860		$	712,603		$	643,928
Investment management segment		46,573			43,888			45,672

Total net operating income of reportable segments		918,433			756,491			689,600
Reconciliation of net operating income of reportable segments to operating income:
Depreciation and amortization		(470,597	)		(376,231	)		(315,451	)
General and administrative expenses		(101,702	)		(92,826	)		(77,424	)
Other (expenses) income, net		(8,981	)		(8,046	)		(12,490	)

Operating income	$	337,153		$	279,388		$	284,235

The assets of our reportable segments are as follows:


	2006		2005
	(In thousands)

ASSETS:
Total assets for reportable segments(1)	$	10,004,701	$	9,738,462
Corporate and other assets		285,074		280,698

Total consolidated assets	$	10,289,775	$	10,019,160


(1)		Total assets for reportable segments include assets associated with both of the real estate and investment management business segments, as well as our investment in unconsolidated real estate partnerships.

Our capital expenditures primarily relate to the real estate segment and totaled $512.6 million, $443.9 million and $301.9 million for the years ended December 31, 2006, 2005 and 2004, respectively.

Note 17 — Transactions with Affiliates

We earn revenue from affiliated real estate partnerships. These revenues include fees for property management services, partnership and asset management services, risk management services and transactional services such as syndication, refinancing, construction supervisory and disposition. In addition, we are reimbursed for our costs in connection with the management of the unconsolidated real estate partnerships. These fees and reimbursements for the years ended December 31, 2006, 2005 and 2004 totaled $27.7 million, $73.6 million and $89.6 million, respectively. The total accounts receivable due from affiliates was $20.8 million, net of allowance for doubtful accounts of $5.3 million, at December 31, 2006, and $43.1 million, net of allowance for doubtful accounts of $4.7 million, at December 31, 2005.

Additionally, we earn interest income on notes from real estate partnerships in which we are the general partner and hold either par value or discounted notes. Interest income earned on par value notes from unconsolidated real estate partnerships totaled $4.0 million, $17.4 million, and $16.8 million for the years ended December 31, 2006, 2005 and 2004, respectively. Accretion income earned on discounted notes from affiliated real estate partnerships totaled $6.7 million, $0.7 million, and $6.2 million for the years ended December 31, 2006, 2005 and 2004, respectively. See Note 5 for additional information on notes receivable from unconsolidated real estate partnerships.

F-42

Note 18 — Recent Accounting Developments

In July 2006, the Financial Accounting Standards Board, or FASB, issued FASB Interpretation No. 48,Accounting for Uncertainty in Income Taxes, or FIN 48. FIN 48 prescribes a two-step process for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. The first step involves evaluation of a tax position to determine whether it is more likely than not that the position will be sustained upon examination, based on the technical merits of the position. The second step involves measuring the benefit to recognize in the financial statements for those tax positions that meet the more-likely-than-not recognition threshold. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. We have not yet determined the effects that FIN 48 will have on our financial statements.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157,Fair Value Measurements, or SFAS 157. SFAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts. SFAS 157 applies whenever other standards require assets or liabilities to be measured at fair value and does not expand the use of fair value in any new circumstances. SFAS 157 establishes a hierarchy that prioritizes the information used in developing fair value estimates. The hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data, such as the reporting entity’s own data. SFAS 157 requires fair value measurements to be disclosed by level within the fair value hierarchy. SFAS 157 is effective for fiscal years beginning after November 15, 2007. We have not yet determined the effects that SFAS 157 will have on our financial statements.

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159,The Fair Value Option for Financial Asset and Financial Liabilities, or SFAS 159. SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. SFAS 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS 159 is effective for fiscal years beginning after November 15, 2007. We have not yet determined whether we will elect the fair value option for any of our financial instruments.

Note 19 — Subsequent Event

F-43

APARTMENT INVESTMENT AND MANAGEMENT COMPANY
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2006
(In Thousands Except Unit Data)


								(2)				(3)		December 31, 2006
		(1)						Initial Cost				Cost Capitalized								Accumulated			Total Cost
	Property	Date		Year		Number				Buildings and		Subsequent to				Buildings and				Depreciation			Net of
Property Name	Type	Consolidated	Location	Built		of Units		Land		Improvements		Acquisition		Land		Improvements		Total		(AD)			AD		Encumbrances

Conventional Properties
100 Forest Place	Mid Rise	Dec-97	OakPark, IL		1987		234	$	2,664	$	18,815	$	2,826	$	2,664	$	21,641	$	24,306	$	(6,543	)	$	17,763	$	25,150
1582 First Avenue	Mid Rise	Mar-05	New York, NY		1900		17		4,250		752		97		4,281		818		5,099		(73	)		5,026		2,756
173 E. 90th	Mid Rise	May-04	New York, NY		1910		72		11,773		4,535		865		12,067		5,106		17,173		(499	)		16,673		9,562
236-238 East 88th Street	Mid Rise	Jan-04	New York, NY		1900		43		8,751		2,914		1,006		8,823		3,847		12,670		(442	)		12,228		7,264
237-239 Ninth Avenue	Mid Rise	Mar-05	New York, NY		1900		36		8,430		1,866		402		8,494		2,204		10,698		(194	)		10,504		5,394
306 East 89th Street	Mid Rise	Jul-04	New York, NY		1930		20		2,659		1,006		118		2,681		1,102		3,782		(134	)		3,648		1,969
311 & 313 East 73rd Street	Mid Rise	Mar-03	New York, NY		1904		34		5,635		1,609		343		5,678		1,909		7,588		(409	)		7,179		2,915
322-324 East 61st Street	Mid Rise	Mar-05	New York, NY		1900		40		6,319		2,224		377		6,372		2,548		8,920		(205	)		8,715		3,865
452 East 78th Street	Mid Rise	Jan-04	New York, NY		1900		12		1,966		608		208		1,982		800		2,782		(87	)		2,695		1,690
510 East 88th Street	Mid Rise	Jan-04	New York, NY		1900		20		3,137		1,002		212		3,163		1,188		4,351		(129	)		4,222		2,781
514-516 East 88th Street	Mid Rise	Mar-05	New York, NY		1900		36		6,230		2,168		332		6,282		2,448		8,730		(194	)		8,536		4,754
Anchorage Apartments	Garden	Nov-96	League City, TX		1985		264		1,155		7,172		2,925		1,155		10,098		11,253		(2,816	)		8,437		3,853
Apartment, The	Garden	Jul-00	Omaha, NE		1973		204		959		8,526		973		959		9,499		10,458		(4,676	)		5,782		3,936
Arbors (Grovetree), The	Garden	Oct-97	Tempe, AZ		1967		200		1,092		6,208		1,901		1,092		8,109		9,201		(2,834	)		6,367		2,763
Arbors of Battle Creek I	Garden	Dec-99	Battle Creek, MI		1981		586		2,732		16,325		6,087		2,732		22,412		25,144		(5,846	)		19,298		7,300
Arbors on Battle Creek II	Garden	Dec-99	Battle Creek, MI		1987		76		496		3,555		406		496		3,961		4,457		(1,083	)		3,374		1,666
Arbors on Westheimer	Garden	Nov-96	Houston, TX		1972		360		1,760		9,325		8,099		1,760		17,424		19,184		(4,518	)		14,666		5,919
Arbours Of Hermitage, The	Garden	Jul-00	Hermitage, TN		1972		350		1,797		14,451		4,900		1,797		19,352		21,148		(8,089	)		13,059		10,798
Ashford, The	Garden	Dec-95	Atlanta, GA		1968		221		2,771		8,366		23,558		2,771		31,924		34,695		(7,721	)		26,975		8,817
Aspen Point	Garden	Dec-97	Arvada, CO		1972		120		353		3,807		3,728		353		7,535		7,888		(3,630	)		4,258		2,772
Aspen Station	Garden	Oct-01	Richmond, VA		1979		232		2,428		7,874		1,172		2,428		9,046		11,474		(3,143	)		8,331		6,559
Atriums of Plantation	Mid Rise	Aug-98	Plantation, FL		1979		210		1,807		10,385		2,243		1,807		12,628		14,435		(3,762	)		10,673		6,649
Auburn Glen	Garden	Dec-06	Jacksonville, FL		1974		251		2,310		13,364		—		2,310		13,364		15,674		—			15,674		—
Autumn Run (IL)	Garden	Oct-02	Naperville, IL		1984		320		1,812		16,911		1,636		1,812		18,547		20,359		(7,599	)		12,760		11,229
Autumn Woods	Garden	Sep-00	Jackson, MI		1973		112		1,042		3,705		1,553		1,042		5,258		6,300		(1,850	)		4,451		2,781
BaLaye	Garden	Apr-06	Tampa, FL		2002		324		5,869		33,260		59		10,391		28,798		39,189		(316	)		38,873		23,953
Bank Lofts	High Rise	Apr-01	Denver, CO		1920		117		3,525		9,045		913		3,525		9,957		13,482		(2,536	)		10,947		7,515
Barcelona	Garden	Oct-99	Houston ,TX		1963		127		770		4,250		1,433		770		5,683		6,452		(1,636	)		4,817		3,086
Bay Parc Plaza	High Rise	Sep-04	Miami, FL		2000		471		22,680		41,847		2,083		22,680		43,930		66,609		(2,446	)		64,164		47,497
Bay Ridge at Nashua	Garden	Jan-03	Nashua, NH		1984		412		3,352		39,831		1,012		3,352		40,843		44,195		(6,515	)		37,680		22,184
Bayberry Hill Estates	Garden	Aug-02	Framingham, MA		1971		424		18,915		35,945		6,220		18,915		42,165		61,081		(7,713	)		53,367		28,706
Bayhead Village	Garden	Oct-00	Indianapolis, IN		1978		202		1,411		5,139		1,832		1,411		6,970		8,381		(2,074	)		6,307		3,211
Beau Jardin	Garden	Apr-01	West Lafayette, IN		1968		252		5,460		5,291		2,123		5,460		7,415		12,875		(3,860	)		9,015		4,429
Beech Lake	Garden	May-99	Durham, NC		1986		345		2,222		12,641		3,135		2,222		15,776		17,997		(5,102	)		12,895		10,500
Beech’s Farm	Garden	Oct-00	Columbia, MD		1983		135		4,166		3,520		1,274		4,166		4,795		8,961		(1,224	)		7,736		10,825
Belmont Place	Garden	Jul-00	Marietta, GA		1972/2004		326		11,298		2,363		29,318		11,298		31,681		42,979		(3,897	)		39,082		19,223
Bent Oaks	Garden	May-98	Austin, TX		1978		146		1,096		6,423		1,022		1,096		7,444		8,540		(2,936	)		5,604		3,400
Bent Tree I	Garden	Oct-02	Indianapolis, IN		1983		240		1,850		6,430		931		1,850		7,361		9,211		(2,092	)		7,119		5,400
Bent Tree III — Verandas	Garden	Sep-00	Indianapolis, IN		1985		96		1,767		3,379		1,156		1,767		4,535		6,302		(1,022	)		5,280		3,100
Bexley House	High Rise	Oct-05	Columbus, OH		1972		64		666		6,203		255		666		6,458		7,124		(1,870	)		5,254		2,029
Big Walnut	Garden	Apr-02	Columbus, OH		1968		251		582		9,701		2,218		582		11,918		12,500		(5,565	)		6,935		5,152
Bluffs (IN), The	Garden	Dec-98	Laffayette, IN		1982		181		979		5,556		1,610		979		7,166		8,145		(3,169	)		4,976		2,951
Bluffs, The (OR)	Garden	Jan-06	Milwaukie, OR		1968		137		333		8,091		61		333		8,152		8,484		(3,595	)		4,890		3,515

F-44


								(2)				(3)		December 31, 2006
		(1)						Initial Cost				Cost Capitalized								Accumulated			Total Cost
	Property	Date		Year		Number				Buildings and		Subsequent to				Buildings and				Depreciation			Net of
Property Name	Type	Consolidated	Location	Built		of Units		Land		Improvements		Acquisition		Land		Improvements		Total		(AD)			AD		Encumbrances

Boston Lofts	High Rise	Apr-01	Denver, CO		1890		158		3,447		20,589		1,597		3,447		22,186		25,632		(5,366	)		20,267		15,083
Boulder Creek	Garden	Jul-94	Boulder, CO		1972		221		755		7,730		16,147		755		23,877		24,632		(9,402	)		15,230		13,879
Brandywine	Garden	Jul-94	St. Petersburg, FL		1971		477		1,437		12,725		4,244		1,437		16,968		18,405		(10,763	)		7,642		8,004
Brant Rock Condominiums	Garden	Oct-97	Houston, TX		1984		84		337		1,976		887		337		2,862		3,199		(1,129	)		2,070		880
Breakers, The	Garden	Oct-98	Daytona Beach, FL		1985		208		1,008		5,507		2,267		1,008		7,774		8,782		(2,705	)		6,077		6,839
Brentwood Apartments	Garden	Nov-96	Lake Jackson, TX		1980		104		592		2,741		1,323		592		4,064		4,656		(1,458	)		3,197		1,205
Briarcliffe	Garden	Oct-00	Lansing, MI		1974		308		3,146		9,586		2,279		3,146		11,865		15,011		(3,627	)		11,384		6,072
Briarwest	Garden	Oct-99	Houston, TX		1970		380		2,459		13,868		2,207		2,459		16,075		18,534		(5,065	)		13,469		8,629
Briarwood	Garden	Oct-99	Houston, TX		1970		351		2,033		11,855		2,696		2,033		14,551		16,585		(4,197	)		12,388		7,937
Bridgewater Apartments, The	Garden	Nov-96	Tomball, TX		1978		206		969		5,976		2,617		969		8,593		9,562		(2,309	)		7,253		3,102
Brighton Crest	Garden	Jan-00	Marietta, GA		1987		320		2,084		13,212		2,641		2,084		15,853		17,937		(7,389	)		10,548		9,257
Broadcast Center	Garden	Mar-02	Los Angeles, CA		1990		279		27,603		41,244		7,067		29,407		46,507		75,914		(6,188	)		69,726		38,563
Broadmoor Ridge	Garden	Dec-97	Colorado Springs, CO		1974		200		460		2,917		10,633		460		13,550		14,010		(2,962	)		11,047		7,472
Bronson Place	Garden	Jan-06	Mountlake Terrace, WA		1988		70		459		1,217		223		459		1,440		1,899		(1,439	)		459		1,878
Brook Run	Garden	May-98	Arlington Heights, IL		1985		182		2,245		12,936		1,721		2,245		14,657		16,902		(5,548	)		11,355		11,800
Brookdale Lakes	Garden	May-98	Naperville, IL		1990		200		2,709		15,346		2,013		2,709		17,359		20,067		(5,921	)		14,146		10,515
Brookwood Apartments (IN)	Garden	Apr-01	Indianapolis, IN		1967		404		4,546		9,136		3,825		4,545		12,962		17,507		(4,304	)		13,204		8,980
Buena Vista	Mid Rise	Jan-06	Pasadena, CA		1973		92		1,108		15,458		39		1,108		15,497		16,605		(4,313	)		12,292		4,361
Burke Shire Commons	Garden	Mar-01	Burke, VA		1986		360		4,867		23,617		2,646		4,867		26,262		31,129		(7,135	)		23,994		18,210
Calhoun Beach Club	High Rise	Dec-98	Minneapolis, MN		1928/1998		332		11,708		73,334		41,176		11,708		114,510		126,218		(26,825	)		99,393		40,940
Canterbury Green Apartments	Garden	Dec-99	Fort Wayne, IN		1979		1,988		13,659		73,115		19,176		13,659		92,291		105,951		(30,989	)		74,962		42,824
Canyon Crest	Garden	Jan-03	Littleton, CO		1966		90		1,313		6,092		418		1,312		6,511		7,823		(2,041	)		5,782		3,051
Canyon Terrace	Garden	Mar-02	Saugus, CA		1984		130		7,300		6,602		1,740		7,508		8,135		15,642		(1,703	)		13,939		5,668
Cape Cod	Garden	May-98	San Antonio, TX		1985		212		1,307		7,012		949		1,307		7,962		9,269		(2,958	)		6,311		3,940
Captiva Club	Garden	Dec-96	Tampa, FL		1973		357		1,600		6,870		11,599		1,600		18,469		20,069		(6,203	)		13,866		7,199
Carriage Hill	Garden	Jul-00	East Lansing, MI		1972		143		830		9,001		1,504		829		10,505		11,334		(4,291	)		7,044		4,669
Casa De Monterey	Garden	Jan-06	Norwalk, CA		1970		144		1,053		14,089		70		1,053		14,159		15,212		(6,101	)		9,111		3,664
Castle Court	High Rise	May-04	Bristol, MA		1974		240		15,239		7,850		2,578		15,244		10,424		25,667		(1,260	)		24,408		10,709
Cedar Rim	Garden	Apr-00	New Castle, WA		1980		104		773		5,497		3,479		773		8,976		9,750		(2,914	)		6,835		4,291
Center Square	High Rise	Oct-99	Doylestown, PA		1975		350		582		4,190		2,228		582		6,418		7,000		(2,117	)		4,883		8,729
Chapelle Le Grande (IN)	Garden	Jan-06	Merrillville, IN		1972		105		273		6,133		76		273		6,209		6,482		(3,549	)		2,933		3,030
Charleston Landing	Garden	Sep-00	Brandon, FL		1985		300		7,488		8,656		4,814		7,488		13,470		20,958		(2,066	)		18,892		10,750
Chatham Harbor	Garden	Oct-99	Altamonte Springs, FL		1985		324		2,288		13,068		1,953		2,288		15,021		17,308		(3,887	)		13,422		8,044
Chelsea Ridge Apartments	Garden	Apr-01	Wappingers Falls, NY		1966		835		10,403		33,000		11,621		10,403		44,621		55,024		(16,540	)		38,484		33,968
Chesapeake Apartments	Garden	Jan-96	Houston, TX		1983		320		775		7,317		2,363		775		9,680		10,455		(3,476	)		6,979		5,538
Chesapeake Landing I	Garden	Sep-00	Aurora, IL		1986		416		15,800		16,875		2,378		15,800		19,252		35,052		(5,121	)		29,931		24,949
Chesapeake Landing II	Garden	Mar-01	Aurora, IL		1987		184		1,969		7,980		1,165		1,969		9,144		11,114		(2,468	)		8,646		6,453
Chestnut Hall	High Rise	Oct-06	Philadelphia, PA		1923		315		6,911		20,296		—		6,911		20,296		27,207		(1,241	)		25,966		13,499
Chestnut Hill (CT)	Garden	Oct-99	Middletown, CT		1986		314		3,001		20,143		1,960		3,001		22,103		25,105		(6,413	)		18,691		16,070
Chestnut Hill (PA)	Garden	Apr-00	Philadelphia, PA		1963		821		6,463		49,315		18,378		6,463		67,693		74,156		(20,347	)		53,809		51,500
Cheswick	Garden	Jun-04	Indianapolis, IN		1976		187		873		5,854		721		873		6,575		7,448		(2,760	)		4,687		4,124
Chimney Top	Garden	Oct-02	Antioch, TN		1985		362		2,430		10,818		1,420		2,430		12,238		14,668		(2,382	)		12,286		7,769
Chimneys of Cradle Rock	Garden	Jun-04	Columbia, MD		1979		198		2,547		9,045		508		2,547		9,553		12,100		(1,940	)		10,160		4,803
Citadel	Garden	Jul-00	El Paso, TX		1973		261		1,024		8,337		618		1,024		8,955		9,978		(4,381	)		5,598		5,457
Citadel Village	Garden	Jul-00	Colorado Springs, CO		1974		122		928		6,779		1,414		928		8,193		9,121		(3,125	)		5,996		1,785
Citrus Grove	Garden	Jun-98	Redlands, CA		1985		198		1,118		6,642		1,761		1,118		8,403		9,521		(2,835	)		6,685		3,935
Citrus Sunset	Garden	Jul-98	Vista, CA		1985		97		663		3,992		1,309		663		5,301		5,964		(1,659	)		4,305		5,900
Colonnade Gardens (Ferntree)	Garden	Oct-97	Phoenix, AZ		1973		196		766		4,346		1,921		766		6,267		7,033		(2,293	)		4,740		2,047
Colony at El Conquistador, The	Garden	Jun-98	Bradenton, FL		1986		166		1,121		6,360		1,537		1,121		7,897		9,017		(2,442	)		6,575		2,724
Colony at Kenilworth	Garden	Oct-99	Towson, MD		1966		383		2,234		19,144		5,433		2,234		24,577		26,811		(11,373	)		15,438		12,338
Columbus Avenue	Mid Rise	Sep-03	New York, NY		1880		59		35,489		9,499		1,918		35,544		11,361		46,905		(2,222	)		44,683		18,996

F-45


								(2)				(3)			December 31, 2006
		(1)						Initial Cost				Cost Capitalized									Accumulated			Total Cost
	Property	Date		Year		Number				Buildings and		Subsequent to					Buildings and				Depreciation			Net of
Property Name	Type	Consolidated	Location	Built		of Units		Land		Improvements		Acquisition			Land		Improvements		Total		(AD)			AD		Encumbrances

Cooper’s Point	Garden	Oct-02	North Charleston, SC		1986		192		730		7,420		889			730		8,309		9,039		(3,518	)		5,521		7,631
Copper Chase Apartments	Garden	Dec-96	Katy, TX		1982		316		1,742		7,010		3,039			1,742		10,048		11,790		(4,516	)		7,274		5,127
Copper Mill Apartments	Garden	Oct-02	Richmond, VA		1987		192		1,039		8,842		1,144			1,039		9,985		11,024		(3,968	)		7,056		10,472
Copperfield Apartments I & II	Garden	Nov-96	Houston, TX		1983		196		940		7,900		1,456			940		9,355		10,295		(2,671	)		7,624		3,777
Coral Garden Apartments	Garden	Jul-94	Las Vegas, NV		1983		670		3,190		12,589		7,346			3,190		19,935		23,125		(10,432	)		12,693		1,691
Country Club West	Garden	May-98	Greeley, CO		1986		288		2,848		16,160		3,194			2,848		19,355		22,203		(6,361	)		15,842		10,258
Country Lakes I	Garden	Apr-01	Naperville, IL		1982		240		8,512		10,832		1,856			8,512		12,688		21,200		(3,421	)		17,779		10,161
Country Lakes II	Garden	May-97	Naperville, IL		1986		400		5,165		29,430		3,234			5,165		32,664		37,829		(10,362	)		27,467		14,376
Courtney Park	Garden	May-98	Fort Collins, CO		1986		248		2,727		15,459		2,703			2,727		18,162		20,889		(5,853	)		15,036		9,097
Coventry Square Apartments	Garden	Nov-96	Houston, TX		1983		270		700		5,072		2,808			700		7,880		8,580		(2,799	)		5,781		3,953
Covington Pointe	Garden	Oct-05	Dallas, TX		1984		180		1,983		11,730		276			1,983		12,005		13,988		(5,074	)		8,914		5,269
Creekside	Garden	Jan-00	Denver, CO		1974		328		1,702		13,694		1,827			1,702		15,521		17,223		(5,913	)		11,310		5,725
Creekside (CA)	Garden	Mar-02	Simi Valley, CA		1985		397		24,595		18,818		3,966			25,245		22,134		47,379		(4,768	)		42,611		35,226
Crescent Gardens	Mid Rise	Mar-02	West Hollywood, CA		1982		130		15,382		10,215		1,745			15,765		11,577		27,342		(2,412	)		24,931		14,952
Crossings Of Bellevue	Garden	May-98	Nashville, TN		1985		300		2,588		14,954		2,827			2,588		17,781		20,370		(6,355	)		14,014		6,685
Crossroads	Garden	May-98	Phoenix, AZ		1982		316		2,180		12,661		2,293			2,180		14,954		17,134		(5,796	)		11,338		5,440
Crosswood	Garden	Jan-06	Citrus Heights, CA		1976		180		805		18,095		244			805		18,339		19,145		(7,109	)		12,035		4,949
Crows Nest Condominiums	Garden	Nov-96	League City, TX		1984		176		939		5,831		1,560			939		7,391		8,330		(2,187	)		6,144		2,090
Cypress Landing	Garden	Dec-96	Savannah, GA		1984		200		1,083		5,696		2,295			1,083		7,991		9,074		(2,875	)		6,199		4,337
Deer Creek	Garden	Apr-00	Plainsboro, NJ		1975		288		2,215		16,804		3,193			2,215		19,998		22,213		(7,888	)		14,324		15,936
Deerbrook at Baymeadows	Garden	Oct-06	Jacksonville, FL		1984		144		2,276		13,188		(0	)		2,276		13,187		15,464		(92	)		15,372		—
Deercross	Garden	Oct-02	Blue Ash, OH		1985		336		4,124		13,061		980			4,124		14,041		18,165		(4,684	)		13,481		12,958
Deercross (IN)	Garden	Oct-00	Indianapolis, IN		1979		372		3,175		10,426		2,488			3,175		12,914		16,089		(3,992	)		12,097		7,742
Defoors Crossing	Garden	Jan-06	Atlanta, GA		1987		60		348		697		66			348		763		1,111		(763	)		348		—
Doral Oaks	Garden	Dec-97	Temple Terrace, FL		1967		252		2,095		3,943		11,298			2,095		15,241		17,337		(5,099	)		12,238		4,546
Douglaston Villas and Townhomes	Garden	Aug-99	Altamonte Springs, FL		1979		234		1,666		9,353		2,450			1,666		11,803		13,469		(4,059	)		9,410		6,005
Dunes Apartment Homes, The	Garden	Oct-99	Indian Harbor, FL		1963		200		1,200		5,739		1,376			1,200		7,115		8,314		(3,790	)		4,524		3,469
Eagle’s Nest	Garden	May-98	San Antonio, TX		1973		226		1,053		5,981		1,370			1,053		7,351		8,404		(3,560	)		4,845		3,695
Easton Village Condominiums I & II	Garden	Nov-96	Houston, TX		1983		146		1,070		9,790		1,006			906		10,961		11,867		(3,781	)		8,085		3,151
Elm Creek	Mid Rise	Dec-97	Elmhurst, IL		1986		372		5,534		30,830		12,394			5,534		43,225		48,758		(10,322	)		38,436		30,961
Essex Park	Garden	Oct-99	Columbia, SC		1971		323		1,122		9,666		2,217			1,122		11,883		13,005		(5,583	)		7,422		5,866
Evanston Place	High Rise	Dec-97	Evanston, IL		1988		189		3,232		25,546		1,533			3,232		27,079		30,311		(7,297	)		23,014		14,741
Fairlane East	Garden	Jan-01	Dearborn, MI		1973		244		6,480		11,177		4,340			6,480		15,517		21,997		(5,246	)		16,751		10,099
Fairway	Garden	Jan-00	Plano, TX		1978		256		3,078		5,199		3,649			3,078		8,848		11,925		(3,813	)		8,113		5,495
Falls of Bells Ferry, The	Garden	May-98	Marietta, GA		1987		720		6,568		37,283		12,946			6,568		50,229		56,797		(16,251	)		40,546		25,000
Farmingdale	Mid Rise	Oct-00	Darien, IL		1975		240		11,763		15,174		6,424			11,763		21,598		33,361		(3,862	)		29,499		18,734
Ferntree	Garden	Mar-01	Phoenix, AZ		1968		219		2,078		13,752		1,515			2,078		15,267		17,346		(3,591	)		13,754		4,148
Fieldcrest (FL)	Garden	Oct-98	Jacksonville, FL		1982		240		1,331		7,617		2,221			1,331		9,838		11,169		(3,244	)		7,926		8,854
Fisherman’s Landing	Garden	Dec-97	Bradenton, FL		1984		200		1,276		7,170		2,332			1,276		9,502		10,779		(3,152	)		7,626		8,149
Fisherman’s Landing	Garden	Sep-98	Temple Terrace, FL		1986		256		1,643		9,446		2,754			1,643		12,200		13,842		(3,886	)		9,957		12,298
Fisherman’s Village	Garden	Jan-06	Indianapolis, IN		1982		328		920		11,173		351			920		11,524		12,444		(5,483	)		6,960		6,350
Fisherman’s Wharf Apartments	Garden	Nov-96	Clute, TX		1981		360		1,257		7,584		3,444			1,257		11,028		12,285		(4,157	)		8,128		2,540
Flamingo South Beach	High Rise	Sep-97	Miami Beach, FL		1960/2005		1,126		32,191		38,399		215,387			32,185		253,793		285,978		(49,223	)		236,755		158,000
Foothill Place	Garden	Jul-00	Salt Lake City, UT		1973		450		3,865		21,817		4,707			3,865		26,525		30,390		(10,090	)		20,300		17,355
Forest Ridge	Garden	Jan-06	Flagstaff, AZ		1967		278		1,013		19,796		146			1,013		19,942		20,955		(7,124	)		13,831		5,220
Four Quarters Habitat	Garden	Jan-06	Miami, FL		1976		336		1,724		20,251		6,496			1,724		26,747		28,471		(12,230	)		16,242		13,426
Fox Crest	Garden	Jan-03	Waukegan, IL		1974		245		2,129		12,316		322			2,129		12,638		14,767		(2,088	)		12,679		6,740
Fox Run (NJ)	Garden	Jan-00	Plainsboro, NJ		1973		776		7,182		48,945		11,978			7,182		60,923		68,106		(21,475	)		46,630		30,079
Foxchase	Garden	Dec-97	Alexandria, VA		1947		2,113		15,419		96,062		19,482			15,419		115,545		130,964		(40,503	)		90,460		171,823
Foxtree	Garden	Oct-97	Tempe, AZ		1976		487		2,458		13,927		8,650			2,458		22,576		25,034		(7,785	)		17,250		6,406
Frankford Place	Garden	Jul-94	Carrollton, TX		1982		274		1,125		6,083		3,805			1,125		9,888		11,013		(3,608	)		7,404		4,499

F-46


								(2)				(3)		December 31, 2006
		(1)						Initial Cost				Cost Capitalized								Accumulated			Total Cost
	Property	Date		Year		Number				Buildings and		Subsequent to				Buildings and				Depreciation			Net of
Property Name	Type	Consolidated	Location	Built		of Units		Land		Improvements		Acquisition		Land		Improvements		Total		(AD)			AD		Encumbrances

Franklin Oaks	Garden	May-98	Franklin, TN		1987		468		3,936		22,832		8,099		3,936		30,932		34,868		(10,151	)		24,717		13,865
Freedom Place Club	Garden	Oct-97	Jacksonville, FL		1988		352		2,289		12,982		2,214		2,289		15,196		17,485		(5,346	)		12,139		5,022
Georgetown (MA)	Garden	Aug-02	Framingham, MA		1964		207		12,351		13,168		1,051		12,351		14,220		26,571		(2,699	)		23,872		14,665
Glenbridge Manors	Garden	Sep-03	Cincinnati, OH		1978		290		1,083		17,961		11,728		1,084		29,689		30,772		(4,817	)		25,956		20,190
Glenwood	Mid Rise	Jan-06	Jackson, MI		1978		144		567		5,511		120		567		5,631		6,198		(3,527	)		2,671		1,836
Governor’s Park (CO)	Garden	Jan-00	Ft. Collins, CO		1982		188		1,116		9,089		1,196		1,116		10,285		11,401		(3,996	)		7,405		6,096
Granada	Mid Rise	Aug-02	Framingham, MA		1958		72		4,577		4,058		765		4,577		4,823		9,400		(1,148	)		8,251		4,905
Grand Pointe	Garden	Dec-99	Columbia, MD		1974		325		2,715		16,771		3,773		2,715		20,544		23,259		(5,291	)		17,968		17,782
Greens (AZ)	Garden	Jul-94	Chandler, AZ		2000		324		2,303		713		30,189		2,303		30,902		33,205		(5,911	)		27,295		14,824
Greenspoint Apartments	Garden	Jan-00	Phoenix, AZ		1985		336		2,196		13,969		2,596		2,196		16,565		18,761		(6,717	)		12,044		10,670
Greentree	Garden	Dec-96	Carrollton, TX		1983		365		1,822		9,557		4,365		1,821		13,922		15,744		(4,721	)		11,023		8,130
Hampton Hill Apartments	Garden	Nov-96	Houston, TX		1984		332		1,311		7,122		3,079		1,311		10,201		11,512		(3,687	)		7,826		5,032
Harbor Town at Jacaranda	Garden	Sep-00	Plantation, FL		1988		280		9,776		10,643		4,224		9,776		14,867		24,643		(3,176	)		21,467		11,800
Harbour, The	Garden	Mar-01	Melbourne, FL		1987		162		4,108		3,563		1,730		4,108		5,294		9,402		(1,854	)		7,548		—
Hastings Place Apartments	Garden	Nov-96	Houston, TX		1984		176		934		5,021		2,539		934		7,559		8,493		(2,103	)		6,390		3,546
Heather Ridge (TX)	Garden	Dec-00	Arlington, TX		1982		180		785		4,900		861		785		5,761		6,546		(2,437	)		4,109		3,112
Heritage Park at Alta Loma	Garden	Jan-01	Alta Loma, CA		1986		232		1,200		6,428		2,505		1,200		8,934		10,133		(2,199	)		7,934		7,264
Heritage Park Escondido	Garden	Oct-00	Escondidi, CA		1986		196		1,009		7,314		551		1,009		7,865		8,874		(3,128	)		5,745		7,299
Heritage Park Livermore	Garden	Oct-00	Livermore, CA		1988		167		829		8,977		822		829		9,799		10,628		(2,722	)		7,906		7,432
Heritage Park Montclair	Garden	Mar-01	Montclair, CA		1985		144		690		4,149		586		690		4,734		5,424		(1,168	)		4,256		4,620
Heritage Village Anaheim	Garden	Oct-00	Anaheim, CA		1986		196		1,779		8,232		890		1,779		9,122		10,901		(3,570	)		7,331		8,858
Hibben Ferry I	Garden	Apr-00	Mt. Pleasant, SC		1983		240		1,460		8,886		8,297		1,460		17,183		18,644		(3,151	)		15,493		9,274
Hidden Cove (CA)	Garden	Jul-98	Escondido, CA		1985		334		3,043		17,615		4,215		3,043		21,830		24,873		(7,075	)		17,798		16,436
Hidden Cove (MI)	Garden	Apr-00	Belleville, MI		1976		120		433		5,166		959		433		6,125		6,559		(3,654	)		2,905		2,444
Hidden Harbour	Garden	Oct-02	Melbourne, FL		1985		216		984		8,050		1,028		984		9,077		10,061		(1,990	)		8,071		6,038
Hidden Lake	Garden	May-98	Tampa, FL		1983		267		1,361		7,765		2,121		1,361		9,886		11,247		(3,353	)		7,895		4,160
Hiddentree	Garden	Oct-97	East Lansing, MI		1966		261		1,470		8,340		2,763		1,470		11,103		12,573		(4,010	)		8,563		3,179
Highcrest Townhomes	Town Home	Jan-03	Woodridge, IL		1968		176		3,210		13,289		814		3,209		14,103		17,312		(4,450	)		12,862		5,732
Highland Park	Garden	Dec-96	Fort Worth, TX		1985		500		6,248		9,246		5,119		6,248		14,365		20,612		(5,551	)		15,062		9,604
Highland Ridge	Garden	Sep-04	Atlanta, GA		1984		219		1,357		6,778		4,598		1,357		11,376		12,733		(3,066	)		9,667		—
Hillcreste (CA)	Garden	Mar-02	Los Angeles, CA		1989		315		33,755		47,216		13,142		35,862		58,252		94,114		(8,353	)		85,761		58,936
Hillmeade	Garden	Nov-94	Nashville, TN		1985		288		2,872		16,069		11,124		2,872		27,193		30,065		(13,920	)		16,146		—
Hills at the Arboretum, The	Garden	Oct-97	Austin, TX		1983		327		1,367		7,764		11,965		1,367		19,729		21,096		(5,087	)		16,009		13,554
Homestead	Garden	Apr-05	East Lansing, MI		1986		168		674		7,650		365		674		8,014		8,688		(3,082	)		5,606		3,868
Horizons West Apartments	Mid Rise	Dec-06	Pacifica, CA		1970		78		2,240		12,899		—		2,240		12,899		15,140		—			15,140		5,703
Hunt Club (MD)	Garden	Sep-00	Gaithersburg, MD		1986		336		17,859		13,149		2,620		17,859		15,769		33,628		(4,282	)		29,346		18,286
Hunt Club (PA)	Garden	Sep-00	North Wales, PA		1986		320		17,122		13,653		2,650		17,122		16,303		33,426		(5,780	)		27,646		30,500
Hunt Club (SC)	Garden	Sep-03	Spartanburg, SC		1987		204		4,138		6,671		792		4,138		7,463		11,601		(1,925	)		9,676		5,385
Hunt Club (TX)	Garden	Mar-01	Austin, TX		1987		384		10,342		11,920		1,483		10,342		13,403		23,745		(5,276	)		18,469		19,936
Hunt Club I	Garden	Oct-00	Ypsilanti, MI		1988		296		2,498		8,872		1,809		2,498		10,681		13,178		(2,979	)		10,199		9,238
Hunt Club II	Garden	Mar-01	Ypsilanti, MI		1988		144		1,628		6,049		753		1,628		6,803		8,430		(1,788	)		6,642		5,031
Hunter’s Chase	Garden	Jan-01	Midlothian, VA		1985		320		7,639		8,668		1,899		7,639		10,567		18,207		(2,192	)		16,014		16,875
Hunter’s Creek	Garden	May-99	Cincinnati, OH		1981		146		661		3,818		1,377		661		5,195		5,856		(1,859	)		3,998		2,631
Hunter’s Crossing (VA)	Garden	Apr-01	Leesburg, VA		1967		164		2,244		7,763		2,039		2,244		9,801		12,045		(3,564	)		8,481		7,000
Hunters Glen	Garden	Apr-98	Austell, GA		1983		72		301		1,731		532		301		2,263		2,563		(791	)		1,772		573
Hunters Glen IV	Garden	Oct-99	Plainsboro, NJ		1976		264		2,227		14,811		3,419		2,227		18,230		20,457		(7,146	)		13,311		16,485
Hunters Glen V	Garden	Oct-99	Plainsboro, NJ		1977		304		2,688		17,797		3,894		2,688		21,691		24,379		(8,446	)		15,933		19,544
Hunters Glen VI	Garden	Oct-99	Plainsboro, NJ		1977		328		2,405		15,912		4,480		2,405		20,392		22,797		(8,664	)		14,133		20,336
Huntington Athletic Club	Garden	Oct-99	Morrisville, NC		1986		212		1,650		11,265		2,692		1,650		13,957		15,607		(5,926	)		9,681		6,114
Hyde Park Tower	High Rise	Oct-04	Chicago, IL		1990		155		4,683		14,928		1,575		4,731		16,456		21,186		(993	)		20,193		13,132
Independence Green	Garden	Jan-06	Farmington Hills, MI		1960		981		6,553		41,126		17,566		6,553		58,692		65,246		(21,175	)		44,071		31,312

F-47


								(2)				(3)		December 31, 2006
		(1)						Initial Cost				Cost Capitalized								Accumulated			Total Cost
	Property	Date		Year		Number				Buildings and		Subsequent to				Buildings and				Depreciation			Net of
Property Name	Type	Consolidated	Location	Built		of Units		Land		Improvements		Acquisition		Land		Improvements		Total		(AD)			AD		Encumbrances

Indian Oaks	Garden	Mar-02	Simi Valley, CA		1986		254		23,927		15,801		2,292		24,523		17,498		42,020		(3,508	)		38,512		26,712
Island Club	Garden	Oct-02	Columbus, OH		1984		308		1,724		9,458		1,184		1,724		10,642		12,366		(1,889	)		10,476		9,952
Island Club (Beville)	Garden	Oct-00	Daytona Beach, FL		1986		204		6,755		9,465		1,322		6,755		10,788		17,543		(4,674	)		12,869		8,440
Island Club (CA)	Garden	Oct-00	Oceanside, CA		1986		592		18,027		28,654		5,628		18,027		34,281		52,308		(8,923	)		43,385		37,664
Island Club (MD)	Garden	Mar-01	Columbia, MD		1986		176		2,351		14,590		1,299		2,351		15,889		18,240		(3,539	)		14,701		11,081
Island Club (Palm Aire)	Garden	Oct-00	Pomano Beach, FL		1988		260		7,615		7,652		8,726		7,615		16,377		23,993		(3,261	)		20,732		11,600
Islandtree	Garden	Oct-97	Savannah, GA		1985		216		1,267		7,191		1,746		1,267		8,937		10,204		(3,242	)		6,962		3,035
Key Towers	High Rise	Apr-01	Alexandria, VA		1964		140		1,526		7,050		1,222		1,526		8,272		9,798		(2,890	)		6,908		9,500
King’s Crossing	Garden	Jul-02	Columbia, MD		1983		168		2,948		6,535		596		2,963		7,116		10,079		(712	)		9,367		14,436
Knolls, The	Garden	Jul-02	Colorado Springs, CO		1972		262		3,144		14,689		9,741		3,144		24,431		27,575		(8,595	)		18,980		8,353
Knollwood	Garden	Jul-00	Nashville, TN		1972		326		1,911		14,032		6,810		1,911		20,842		22,753		(7,194	)		15,559		11,435
La Jolla de Tucson	Garden	May-98	Tucson, AZ		1978		223		1,342		7,816		1,428		1,342		9,243		10,585		(3,859	)		6,725		4,439
Lake Castleton	Garden	May-99	Indianapolis, IN		1997		1,261		5,183		29,611		9,713		5,183		39,324		44,507		(12,561	)		31,945		28,222
Lake Forest Apartments	Garden	Jul-00	Omaha, NE		1971		312		1,892		12,839		1,253		1,892		14,092		15,984		(7,140	)		8,844		8,416
Lake Johnson Mews	Garden	Oct-99	Raleigh, NC		1972		201		1,266		9,411		4,626		1,266		14,036		15,302		(5,419	)		9,883		6,083
Lakehaven I	Garden	Dec-97	Carol Stream, IL		1984		144		1,652		3,849		875		1,652		4,724		6,376		(3,215	)		3,161		5,416
Lakehaven II	Garden	Dec-97	Carol Stream, IL		1985		348		2,822		16,128		2,120		2,822		18,248		21,069		(7,463	)		13,606		13,627
Lakes at South Coast, The	Mid Rise	Mar-02	Costa Mesa, CA		1987		770		55,223		65,506		12,171		57,240		75,660		132,901		(12,561	)		120,339		105,000
Lakes, The	Garden	Jan-00	Raleigh, NC		1972		600		2,818		18,452		4,069		2,818		22,521		25,339		(11,159	)		14,179		9,495
Lakeside (IL)	Garden	Oct-99	Lisle, IL		1972		568		4,066		29,778		4,201		4,066		33,979		38,045		(11,944	)		26,102		21,228
Lakeside (NC)	Garden	Oct-05	Charlotte, NC		1981		216		1,144		9,336		170		1,144		9,506		10,650		(4,210	)		6,440		2,649
Lakeside North at Carrollwood	Garden	Sep-00	Tampa, FL		1984		168		3,118		5,358		1,073		3,118		6,432		9,550		(1,893	)		7,657		5,985
Lakeside Place	Garden	Oct-99	Houston, TX		1976		734		4,780		35,814		6,050		4,780		41,864		46,644		(17,342	)		29,302		19,525
Lakewood	Garden	Jul-02	Tomball, TX		1979		256		801		8,328		1,706		801		10,034		10,835		(3,807	)		7,028		4,607
Lakewood At Pelham (SC)	Garden	Jan-06	Greenville, SC		1979		271		541		6,437		2,088		541		8,524		9,065		(4,545	)		4,520		4,350
Lamplighter Park	Garden	Apr-00	Bellevue, WA		1967		174		1,974		8,478		3,007		1,974		11,485		13,459		(3,972	)		9,487		6,844
Landmark	Garden	Apr-00	Raleigh, NC		1970		292		1,691		13,442		2,394		1,691		15,836		17,527		(7,214	)		10,313		8,535
Las Brisas (TX)	Garden	Dec-95	San Antonio, TX		1983		176		1,082		5,214		1,542		1,082		6,756		7,838		(2,566	)		5,272		3,392
Latrobe	High Rise	Jan-03	Washington, DC		1980		176		1,305		11,257		4,335		1,305		15,592		16,897		(6,074	)		10,823		16,045
Lazy Hollow	Garden	Apr-05	Columbia, MD		1979		178		1,347		14,776		342		1,347		15,118		16,465		(4,570	)		11,895		8,931
Lebanon Station	Garden	Oct-99	Columbus, OH		1974		387		1,694		9,569		2,281		1,694		11,850		13,544		(4,284	)		9,260		6,177
Legend Oaks	Garden	May-98	Tampa, FL		1983		416		2,304		13,288		2,589		2,304		15,877		18,181		(5,552	)		12,629		6,058
Lewis Park	Garden	Jan-06	Carbondale, IL		1972		269		740		12,846		964		740		13,810		14,550		(7,406	)		7,143		4,602
Lexington	Garden	Jul-94	San Antonio, TX		1981		72		312		1,688		751		312		2,440		2,752		(1,035	)		1,717		—
Lighthouse at Twin Lakes I	Garden	Apr-00	Beltsville, MD		1969		479		2,518		17,396		4,706		2,518		22,102		24,620		(4,899	)		19,721		40,000
Lighthouse at Twin Lakes II	Garden	Apr-00	Beltsville, MD		1971		113		695		4,841		620		695		5,461		6,156		(1,371	)		4,785		—
Lighthouse at Twin Lakes III	Garden	Apr-00	Beltsville, MD		1978		107		482		3,299		235		482		3,534		4,016		(713	)		3,303		—
Lincoln Place Garden	Garden	Oct-04	Venice, CA		1951		755		129,417		10,439		31,719		129,417		42,158		171,574		(105	)		171,469		72,500
Lodge, The	Garden	Jan-00	Denver, CO		1973		376		1,987		13,935		2,862		1,987		16,797		18,784		(6,496	)		12,288		6,341
Loft, The	Garden	Oct-99	Raleigh, NC		1974		184		1,995		11,748		1,612		1,995		13,360		15,355		(5,235	)		10,120		4,515
Los Arboles	Garden	Sep-97	Chandler, AZ		1985		232		1,662		9,504		2,552		1,662		12,057		13,719		(4,246	)		9,472		5,498
Malibu Canyon	Garden	Mar-02	Calabasas, CA		1986		698		66,257		53,438		21,512		69,834		71,372		141,207		(15,466	)		125,740		64,368
Maple Bay	Garden	Dec-99	Virginia Beach, VA		1971		414		2,598		16,141		7,791		2,598		23,932		26,530		(6,103	)		20,427		19,624
Mariners Cove	Garden	Mar-02	San Diego, CA		1984		500		—		66,861		4,565		1,000		70,426		71,426		(10,733	)		60,692		8,224
Mariner’s Cove	Garden	Mar-00	Virginia Beach, VA		1974		458		1,517		10,034		15,750		1,517		25,785		27,301		(7,236	)		20,066		11,231
Meadow Creek	Garden	Jul-94	Boulder, CO		1972		332		1,435		24,532		4,985		1,435		29,518		30,953		(9,574	)		21,379		5,228
Meadows	Garden	Dec-00	Austin, TX		1983		100		580		3,667		506		580		4,173		4,752		(1,871	)		2,881		2,269
Merrill House	High Rise	Jan-00	Fairfax, VA		1962		159		1,836		10,831		2,008		1,836		12,839		14,675		(2,881	)		11,795		6,433
Mesa Ridge	Garden	May-98	San Antonio, TX		1986		200		1,210		6,863		1,075		1,210		7,938		9,148		(2,877	)		6,271		3,945
Michigan Apartments	Garden	Dec-99	Indianapolis, IN		1965		185		516		3,694		530		516		4,224		4,741		(1,489	)		3,252		988
Montecito	Garden	Jul-94	Austin, TX		1985		268		1,268		6,896		3,852		1,268		10,748		12,016		(4,846	)		7,170		4,469

F-48


								(2)				(3)		December 31, 2006
		(1)						Initial Cost				Cost Capitalized								Accumulated			Total Cost
	Property	Date		Year		Number				Buildings and		Subsequent to				Buildings and				Depreciation			Net of
Property Name	Type	Consolidated	Location	Built		of Units		Land		Improvements		Acquisition		Land		Improvements		Total		(AD)			AD		Encumbrances

Mountain Run	Garden	Dec-97	Arvada, CO		1974		96		685		2,614		2,794		685		5,407		6,092		(1,884	)		4,209		2,839
Mountain View	Garden	May-98	Colorado Springs, CO		1985		252		2,546		14,841		1,900		2,546		16,741		19,287		(5,804	)		13,483		7,069
Mountain View (CA)	Garden	Jan-06	San Dimas, CA		1978		168		1,702		24,144		161		1,702		24,305		26,008		(7,531	)		18,477		6,437
Newport	Garden	Jul-94	Avondale, AZ		1986		204		800		4,354		2,526		800		6,881		7,681		(2,924	)		4,756		3,688
North Park	Garden	Jan-06	Evansville, IN		1970		284		761		14,786		180		761		14,966		15,727		(7,997	)		7,730		6,091
North River Place	Garden	Jul-02	Chillicothe, OH		1980		120		858		3,351		402		858		3,753		4,611		(1,282	)		3,330		2,497
North Slope	Garden	Oct-02	Greenville, SC		1984		156		1,670		5,756		508		1,670		6,263		7,933		(1,659	)		6,274		3,745
Northwoods	Garden	Oct-02	Worthington, OH		1983		280		2,667		9,260		1,181		2,664		10,444		13,109		(1,760	)		11,348		6,465
Northwoods (CT)	Garden	Mar-01	Middletown, CT		1987		336		16,080		14,435		1,199		16,080		15,634		31,714		(4,372	)		27,343		21,275
Oak Falls Condominiums	Garden	Nov-96	Spring, TX		1983		144		1,017		5,420		1,786		1,017		7,206		8,223		(1,881	)		6,342		3,876
Oak Forest	Garden	Oct-02	Arlington, TX		1983		204		1,020		5,888		1,267		1,020		7,155		8,175		(2,975	)		5,200		3,720
Oak Forest I	Garden	Jan-06	Monroe, MI		1984		48		519		4,201		37		519		4,239		4,757		(2,039	)		2,719		1,505
Oak Forest II	Garden	Jan-06	Monroe, MI		1985		56		290		4,511		48		290		4,560		4,850		(2,315	)		2,534		1,839
Oak Forest III	Garden	Oct-06	Monroe, MI		1986		68		141		2,755		1		141		2,756		2,897		(1,860	)		1,036		1,728
Oak Park Village I	Garden	Oct-00	Lansing, MI		1973		618		10,048		16,771		5,876		10,048		22,647		32,696		(8,891	)		23,805		23,487
Oakwood (OH)	Garden	Jan-06	Toledo, OH		1988		143		567		6,022		128		567		6,150		6,717		(3,282	)		3,434		3,430
Oakwood Miami	High Rise	Dec-03	Miami, FL		1998		357		31,363		32,214		1,976		31,363		34,190		65,553		(2,512	)		63,041		46,004
Ocean Oaks	Garden	May-98	Port Orange, FL		1988		296		2,132		12,855		2,256		2,132		15,111		17,243		(4,626	)		12,618		10,295
Ocean View Apartment	Garden	Oct-06	Pacifica, CA		1963		63		1,794		10,312		9		7,974		4,140		12,115		(27	)		12,088		6,700
Oceanfront	Garden	Nov-96	Galveston, TX		1985		102		513		3,045		5,234		513		8,278		8,792		(1,962	)		6,829		1,549
One Lytle Place	High Rise	Jan-00	Cincinnati ,OH		1980		231		2,662		21,800		9,806		2,898		31,371		34,268		(6,093	)		28,176		11,797
Pacifica Park	Garden	Jul-06	Pacifica, CA		1977		104		2,902		16,447		1,079		12,717		7,712		20,428		(85	)		20,343		11,807
Palazzo at Park La Brea	Mid Rise	Feb-04	Los Angeles, CA		2002		521		47,822		125,464		4,399		47,822		129,863		177,686		(13,549	)		164,137		103,774
Palazzo East at Park La Brea	Mid Rise	Mar-05	Los Angeles, CA		2005		611		61,004		136,503		16,673		72,555		141,625		214,180		(9,287	)		204,893		150,000
Palencia	Garden	May-98	Tampa, FL		1985		420		2,804		16,262		8,744		2,804		25,007		27,810		(8,365	)		19,445		12,044
Palm Lake	Garden	Oct-99	Tampa ,FL		1972		150		876		5,218		1,880		876		7,098		7,974		(3,823	)		4,151		2,529
Paradise Palms	Garden	Jul-94	Phoenix, AZ		1985		129		647		3,515		5,440		647		8,956		9,603		(2,938	)		6,664		1,724
Park at Cedar Lawn, The	Garden	Nov-96	Galveston, TX		1985		192		1,025		6,162		1,985		1,025		8,148		9,173		(2,483	)		6,690		4,152
Park at Deerbrook	Garden	Oct-99	Humble, TX		1984		100		175		522		279		175		801		976		(801	)		175		2,283
Park Capitol	Garden	Apr-00	Salt Lake City, UT		1972		135		731		5,215		1,418		731		6,633		7,364		(2,845	)		4,519		4,849
Park Towne	High Rise	Apr-00	Philadelphia, PA		1959		973		10,451		47,301		27,396		10,451		74,697		85,148		(11,538	)		73,610		71,978
Parktown Townhouses	Garden	Oct-99	Deer Park, TX		1968		309		1,726		12,590		6,280		1,726		18,870		20,596		(5,797	)		14,799		6,512
Parkway (VA)	Garden	Mar-00	Willamsburg, VA		1971		148		386		2,834		1,600		386		4,434		4,820		(2,421	)		2,399		4,879
Pathfinder Village	Garden	Jan-06	Fremont, CA		1973		246		3,144		35,597		261		3,144		35,858		39,001		(12,492	)		26,509		12,532
Peachtree Park	Garden	Jan-96	Atlanta, GA		1962/1995		303		4,683		11,713		8,944		4,683		20,657		25,340		(6,840	)		18,500		10,357
Peakview Place	Garden	Jan-00	Englewood, CO		1975		296		2,016		19,985		3,643		2,016		23,628		25,644		(10,312	)		15,332		10,087
Pebble Point	Garden	Oct-02	Indianapolis, IN		1980		220		1,790		6,883		1,003		1,790		7,887		9,677		(2,807	)		6,870		5,433
Peppermill Place Apartments	Garden	Nov-96	Houston, TX		1983		224		844		5,169		1,981		844		7,150		7,994		(1,963	)		6,031		3,878
Peppertree	Garden	Mar-02	Cypress, CA		1971		136		7,835		5,224		1,528		8,030		6,558		14,587		(1,668	)		12,920		6,091
Pine Lake Terrace	Garden	Mar-02	Garden Grove, CA		1971		111		3,975		6,035		1,168		4,125		7,054		11,178		(1,426	)		9,752		4,307
Pine Shadows	Garden	May-98	Phoenix, AZ		1983		272		2,095		11,899		2,982		2,095		14,881		16,976		(5,041	)		11,935		7,500
Pines, The	Garden	Oct-98	Palm Bay, FL		1984		216		603		3,318		1,612		603		4,929		5,532		(1,656	)		3,876		2,043
Plantation Crossing	Garden	Jan-00	Marietta, GA		1979		180		1,106		9,202		1,999		1,106		11,202		12,308		(4,787	)		7,521		3,965
Plantation Gardens	Garden	Oct-99	Plantation ,FL		1971		372		3,747		19,109		3,347		3,747		22,456		26,203		(8,621	)		17,581		8,200
Pleasant Valley Pointe	Garden	Nov-94	Little Rock, AR		1985		112		907		5,085		1,784		907		6,869		7,776		(2,926	)		4,850		—
Plum Creek	Garden	Oct-02	Charlotte, NC		1984		276		3,076		9,144		664		3,076		9,808		12,884		(2,023	)		10,861		7,432
Pointe At Stone Canyon, The	Garden	Jan-06	Dallas, TX		1978		164		747		4,532		1,143		747		5,676		6,422		(2,914	)		3,508		2,671
Post Ridge	Garden	Jul-00	Nashville, TN		1972		150		1,041		7,907		1,459		1,041		9,366		10,407		(3,783	)		6,624		4,228
Presidential House	Mid Rise	Sep-05	N. Miami Beach, FL		1963		203		1,362		10,614		760		1,362		11,375		12,737		(4,525	)		8,211		4,693
Preston Creek	Garden	Oct-99	Dallas, TX		1979		228		1,598		8,944		4,746		1,598		13,690		15,288		(5,620	)		9,668		4,755
Quail Hollow	Garden	Oct-99	West Columbia, SC		1973		215		1,091		7,872		1,822		1,091		9,694		10,785		(3,582	)		7,203		4,470

F-49


								(2)				(3)		December 31, 2006
		(1)						Initial Cost				Cost Capitalized								Accumulated			Total Cost
	Property	Date		Year		Number				Buildings and		Subsequent to				Buildings and				Depreciation			Net of
Property Name	Type	Consolidated	Location	Built		of Units		Land		Improvements		Acquisition		Land		Improvements		Total		(AD)			AD		Encumbrances

Quail Ridge	Garden	May-98	Tucson, AZ		1974		253		1,559		9,173		1,944		1,559		11,117		12,676		(4,598	)		8,078		4,945
Quail Run	Garden	Oct-99	Zionsville, IN		1972		166		1,222		6,803		1,215		1,222		8,018		9,240		(2,956	)		6,284		4,928
Ramblewood Apartments (MI)	Garden	Dec-99	Grand Rapids, MI		1973		1,698		9,500		61,769		12,878		9,500		74,648		84,148		(20,554	)		63,594		30,676
Raven Hill	Garden	Jan-01	Burnsville, MN		1971		304		4,888		10,632		2,924		4,888		13,556		18,444		(5,610	)		12,834		10,742
Ravensworth Towers	High Rise	Jun-04	Annandale, VA		1974		219		1,811		18,680		1,162		1,811		19,842		21,654		(8,110	)		13,544		14,582
Reflections	Garden	Apr-02	Indianapolis, IN		1970		582		1,239		18,439		10,926		1,239		29,365		30,604		(10,081	)		20,523		12,550
Reflections (Casselberry)	Garden	Oct-02	Casselberry, FL		1984		336		3,052		11,607		2,418		3,052		14,026		17,077		(2,733	)		14,344		10,700
Reflections (Tampa)	Garden	Sep-00	Tampa, FL		1988		348		7,976		13,499		4,477		7,976		17,976		25,952		(3,636	)		22,315		13,500
Reflections (Virginia Beach)	Garden	Sep-00	Virginia Beach, VA		1987		480		15,988		13,684		3,579		15,988		17,262		33,250		(4,989	)		28,261		25,109
Reflections (West Palm Beach)	Garden	Oct-00	West Palm Beach, FL		1986		300		5,504		9,984		3,068		5,504		13,052		18,556		(3,175	)		15,381		9,248
Regency Oaks	Garden	Oct-99	Fern Park, FL		1965		343		1,806		9,847		5,358		1,806		15,205		17,011		(7,410	)		9,602		6,439
Remington at Ponte Vedra Lakes	Garden	Dec-06	Ponte Vedra Beach, FL		1986		344		5,491		31,735		—		5,491		31,735		37,226		(132	)		37,094		25,000
River Club	Garden	Apr-05	Edgewater, NJ		1998		266		30,578		30,638		935		30,579		31,572		62,150		(2,104	)		60,047		43,284
River Reach	Garden	Sep-00	Naples, FL		1986		556		17,728		18,337		4,016		17,728		22,353		40,081		(6,499	)		33,582		24,000
Riverbend Village	Garden	Jul-01	Arlington, TX		1983		201		893		4,128		1,925		893		6,054		6,946		(2,442	)		4,504		3,965
Rivercrest	Garden	Oct-99	Atlanta, GA		1970		312		2,320		16,370		11,491		2,320		27,861		30,181		(6,515	)		23,666		10,221
Riverloft Apartments	High Rise	Oct-99	Philadelphia, PA		1910		184		2,120		11,287		30,057		2,120		41,344		43,464		(11,671	)		31,793		22,817
Rivers Edge	Garden	Jul-00	Auburn, WA		1976		120		732		5,019		652		732		5,672		6,404		(2,335	)		4,069		3,331
Riverside	Mid Rise	Jul-94	Littleton, CO		1987		248		1,956		8,427		3,431		1,956		11,858		13,814		(5,010	)		8,804		7,375
Riverside Park	High Rise	Apr-00	Alexandria ,VA		1973		1,223		8,365		69,985		29,172		8,364		99,157		107,522		(35,272	)		72,249		80,490
Riverwind at St. Andrews	Garden	Apr-02	Columbia, SC		1984		160		1,246		4,370		268		1,246		4,638		5,884		(1,037	)		4,847		4,613
Riverwood (IN)	Garden	Oct-00	Indianapolis, IN		1978		120		1,032		3,424		1,199		1,032		4,623		5,655		(1,462	)		4,193		3,513
Rosewood	Garden	Mar-02	Camarillo, CA		1976		152		12,128		8,060		2,144		12,430		9,902		22,332		(1,987	)		20,344		7,674
Royal Crest Estates (Fall River)	Garden	Aug-02	Fall River, MA		1974		216		5,832		12,044		1,609		5,832		13,653		19,486		(3,505	)		15,980		9,935
Royal Crest Estates (Marlboro)	Garden	Aug-02	Marlborough, MA		1970		473		25,178		28,786		1,969		25,178		30,755		55,933		(8,443	)		47,490		30,318
Royal Crest Estates (Nashua)	Garden	Aug-02	Nashua, MA		1970		902		68,231		45,562		3,698		68,231		49,259		117,490		(12,931	)		104,559		53,300
Royal Crest Estates (North Andover)	Garden	Aug-02	North Andover, MA		1970		588		51,292		36,808		6,066		51,292		42,873		94,165		(11,667	)		82,498		47,024
Royal Crest Estates (Warwick)	Garden	Aug-02	Warwick, RI		1972		492		22,433		24,095		3,246		22,433		27,341		49,774		(6,836	)		42,938		24,932
Royal Palms	Garden	Jul-94	Mesa, AZ		1985		152		832		4,569		2,258		832		6,828		7,659		(2,488	)		5,172		—
Runaway Bay	Garden	Jul-02	Pinellas Park, FL		1986		192		1,933		7,341		581		1,933		7,922		9,856		(1,597	)		8,259		9,422
Runaway Bay (CA)	Garden	Oct-00	Antioch, CA		1986		280		12,503		10,499		1,956		12,503		12,456		24,959		(3,487	)		21,472		12,100
Runaway Bay (FL)	Garden	Oct-00	Lantana, FL		1987		404		5,934		16,052		3,199		5,934		19,251		25,186		(4,565	)		20,620		11,564
Runaway Bay (MI)	Garden	Oct-00	Lansing, MI		1987		288		2,106		6,559		2,152		2,106		8,711		10,817		(3,155	)		7,662		8,522
Runaway Bay (NC)	Garden	Oct-00	Charlotte, NC		1985		280		2,233		9,860		2,454		2,233		12,315		14,548		(3,666	)		10,881		6,000
Runaway Bay (Virginia Beach)	Garden	Nov-04	Virginia Beach, VA		1985		440		8,089		15,700		2,727		9,478		17,037		26,516		(1,485	)		25,031		17,430
Runaway Bay II (OH)	Garden	Jan-06	Columbus, OH		1982		132		824		6,519		399		824		6,917		7,742		(2,413	)		5,329		5,522
Runawaybay I	Garden	Sep-03	Columbus, OH		1982		304		2,273		11,980		1,365		2,273		13,345		15,618		(4,857	)		10,761		10,217
Salem Park	Garden	Apr-00	Ft. Worth, TX		1984		168		837		4,109		2,226		837		6,335		7,173		(2,536	)		4,636		3,396
Sand Castles Apartments	Garden	Oct-97	League City, TX		1987		138		978		5,542		1,854		978		7,396		8,374		(2,528	)		5,845		2,231
Sandpiper Cove	Garden	Dec-97	Boynton Beach, FL		1987		416		3,511		21,396		7,062		3,511		28,458		31,970		(8,145	)		23,824		20,695
Savannah Trace	Garden	Mar-01	Shaumburg, IL		1986		368		13,960		20,731		1,576		13,960		22,308		36,268		(5,834	)		30,434		22,971
Sawgrass	Garden	Jul-97	Orlando, FL		1986		208		1,443		8,137		2,799		1,443		10,936		12,378		(3,692	)		8,686		2,556
Scandia	Garden	Oct-00	Indianapolis, IN		1977		444		10,540		9,852		9,894		10,540		19,747		30,287		(5,453	)		24,835		19,571
Scotch Pines East	Garden	Jul-00	Ft. Collins, CO		1977		102		460		4,880		416		460		5,296		5,756		(2,424	)		3,332		2,687
Scotchollow	Garden	Jan-06	San Mateo, CA		1971		418		4,520		69,562		315		4,520		69,878		74,398		(21,218	)		53,180		27,385
Shadetree	Garden	Oct-97	Tempe, AZ		1965		124		591		3,359		2,430		591		5,789		6,380		(2,080	)		4,300		1,483
Shadow Creek (AZ)	Garden	May-98	Phoenix, AZ		1984		266		2,016		11,886		2,448		2,016		14,334		16,350		(5,432	)		10,918		5,395
Shadow-Wood (LA)	Garden	Jan-06	Monroe, LA		1974		120		319		6,049		99		319		6,148		6,467		(3,270	)		3,197		1,975
Shenandoah Crossing	Garden	Sep-00	Fairfax, VA		1984		640		18,492		57,197		5,459		18,492		62,656		81,148		(19,021	)		62,127		31,500
Sienna Bay	Garden	Apr-00	St. Petersburg, FL		1984		276		1,556		9,141		7,140		1,556		16,281		17,837		(4,499	)		13,338		11,000
Signal Pointe	Garden	Oct-99	Winter Park, FL		1971		368		1,485		12,653		3,779		1,485		16,433		17,918		(6,534	)		11,383		7,411

F-50


								(2)				(3)		December 31, 2006
		(1)						Initial Cost				Cost Capitalized								Accumulated			Total Cost
	Property	Date		Year		Number				Buildings and		Subsequent to				Buildings and				Depreciation			Net of
Property Name	Type	Consolidated	Location	Built		of Units		Land		Improvements		Acquisition		Land		Improvements		Total		(AD)			AD		Encumbrances

Signature Point Apartments	Garden	Nov-96	League City, TX		1994		304		2,810		17,579		2,033		2,810		19,612		22,421		(4,886	)		17,535		7,886
Silver Ridge	Garden	Oct-98	Maplewood, MN		1986		186		775		3,765		1,631		775		5,396		6,171		(2,107	)		4,064		4,525
Snug Harbor	Garden	Dec-95	Las Vegas, NV		1991		64		751		2,859		1,593		751		4,452		5,203		(1,759	)		3,444		1,873
Somerset Lakes	Garden	May-99	Indianapolis, IN		1974		360		3,436		19,668		2,913		3,436		22,580		26,016		(7,005	)		19,011		18,672
Somerset Village	Garden	May-96	West Valley City, UT		1985		486		4,315		16,727		6,410		4,315		23,137		27,452		(8,469	)		18,983		9,356
South Willow	Garden	Jul-94	West Jordan, UT		1987		440		2,224		12,075		4,712		2,224		16,787		19,012		(7,052	)		11,960		2,066
Southridge	Garden	Dec-00	Greenville, TX		1984		160		695		4,416		1,577		695		5,993		6,688		(3,166	)		3,521		3,165
Springhill Lake	Garden	Apr-00	Greenbelt, MD		1969		2,877		14,330		99,081		36,096		15,070		134,437		149,507		(48,191	)		101,316		113,500
Springhouse (KY)	Garden	Mar-04	Lexington, KY		1986		224		2,126		6,721		480		2,126		7,202		9,328		(1,560	)		7,768		6,541
Springhouse (SC)	Garden	Oct-02	North Charleston, SC		1986		248		3,488		10,331		769		3,488		11,101		14,589		(2,541	)		12,048		8,600
Springhouse at Newport	Garden	Jul-02	Newport News, VA		1986		432		9,479		11,425		2,222		9,479		13,647		23,126		(1,963	)		21,163		16,600
Springwoods at Lake Ridge	Garden	Jul-02	Lake Ridge, VA		1984		180		2,899		9,693		507		2,899		10,200		13,099		(591	)		12,508		15,180
Spyglass	Garden	Oct-02	Indianapolis, IN		1979		120		971		3,985		799		971		4,785		5,755		(1,464	)		4,291		2,708
Spyglass at Cedar Cove	Garden	Sep-00	Lexington Park, MD		1985		152		3,241		5,094		927		3,241		6,021		9,262		(1,640	)		7,622		4,215
Stafford	High Rise	Oct-02	Baltimore, MD		1889		96		706		4,032		3,737		706		7,769		8,476		(2,209	)		6,266		—
Steeplechase	Garden	Oct-00	Williamsburg, VA		1986		220		7,601		8,029		2,256		7,601		10,285		17,886		(2,690	)		15,196		12,425
Steeplechase (MD)	Garden	Sep-00	Largo, MD		1986		240		3,675		16,111		1,905		3,675		18,016		21,692		(4,504	)		17,188		11,559
Steeplechase (OH)	Garden	May-99	Loveland, OH		1988		272		1,975		9,264		1,719		1,960		10,999		12,959		(3,826	)		9,133		8,282
Steeplechase (TX)	Garden	Jul-02	Plano, TX		1985		368		6,438		9,596		1,545		6,438		11,141		17,578		(2,193	)		15,386		14,200
Sterling Apartment Homes, The	Garden	Oct-99	Philadelphia, PA		1962		535		8,508		54,050		14,449		8,508		68,499		77,007		(21,864	)		55,143		20,637
Stirling Court Apartments	Garden	Nov-96	Houston, TX		1984		228		913		4,953		1,847		913		6,800		7,713		(2,026	)		5,687		3,736
Stone Creek Club	Garden	Sep-00	Germantown, MD		1984		240		13,593		9,347		2,249		13,593		11,596		25,189		(4,854	)		20,335		11,699
Stone Point Village	Garden	Dec-99	Fort Wayne, IN		1981		296		1,541		8,636		2,754		1,541		11,391		12,932		(3,845	)		9,087		5,192
Stonebrook	Garden	Jun-97	Sanford, FL		1991		244		1,583		8,587		3,299		1,583		11,886		13,468		(4,215	)		9,253		5,892
Stonebrook II	Garden	Mar-99	Sanford, FL		1998		112		488		8,736		376		488		9,112		9,600		(1,657	)		7,943		3,268
Stoney Brook Apartments	Garden	Nov-96	Houston, TX		1972		113		275		1,865		1,422		275		3,287		3,563		(748	)		2,815		2,142
Stonybrook	Garden	May-98	Tucson, AZ		1983		411		2,167		12,670		314		2,167		12,984		15,151		(5,351	)		9,800		4,028
Stratford, The (TX)	Garden	May-98	San Antonio, TX		1979		269		1,825		10,748		1,704		1,825		12,452		14,277		(4,959	)		9,318		4,600
Summit Creek	Garden	May-98	Austin, TX		1985		164		1,211		6,037		1,230		1,211		7,267		8,478		(2,176	)		6,302		3,134
Sun Lake	Garden	May-98	Lake Mary, FL		1986		600		4,551		25,543		7,672		4,551		33,214		37,766		(10,859	)		26,907		24,101
Sun River Village	Garden	Oct-99	Tempe ,AZ		1981		334		1,837		13,717		2,788		1,837		16,505		18,342		(6,652	)		11,690		8,519
Sunbury Downs Apartments	Garden	Nov-96	Houston, TX		1982		240		936		6,059		1,898		936		7,957		8,893		(2,402	)		6,490		4,183
Sunlake	Garden	Sep-98	Brandon, FL		1986		88		610		4,062		1,012		610		5,075		5,685		(1,981	)		3,704		2,161
Sycamore Creek	Garden	Apr-00	Cincinnati ,OH		1978		295		1,984		9,614		3,332		1,984		12,946		14,929		(4,032	)		10,898		7,038
Talbot Woods	Garden	Sep-04	Middleboro, MA		1972		121		5,852		4,719		1,734		5,852		6,452		12,305		(714	)		11,591		6,283
Tamarac Village	Garden	Apr-00	Denver, CO		1979		564		3,413		21,411		5,060		3,413		26,471		29,883		(10,015	)		19,868		17,956
Tamarind Bay	Garden	Jan-00	St. Petersburg, FL		1980		200		694		6,855		3,048		694		9,903		10,597		(3,595	)		7,002		7,073
Tar River Estates	Garden	Oct-99	Greenville, NC		1969		220		1,288		13,999		3,110		1,288		17,109		18,397		(5,695	)		12,702		4,515
Tatum Gardens	Garden	May-98	Phoenix, AZ		1985		128		1,323		7,155		1,241		1,323		8,396		9,719		(3,461	)		6,258		3,169
Tempo, The	High Rise	Sep-04	New York, NY		1900		200		68,006		12,140		1,980		68,082		14,044		82,126		(844	)		81,281		31,962
Terrace Garden Townhouses	Town Home	Jan-06	Omaha, NE		1975		126		565		9,433		82		565		9,515		10,080		(4,801	)		5,279		4,130
Timber Ridge	Garden	Oct-99	Sharonville, OH		1972		248		1,184		8,077		1,499		1,184		9,575		10,759		(3,382	)		7,378		5,040
Timbermill	Garden	Oct-95	San Antonio, TX		1982		296		778		4,457		2,317		778		6,774		7,552		(2,867	)		4,685		2,692
Timbertree	Garden	Oct-97	Phoenix, AZ		1979		387		2,292		13,000		3,542		2,292		16,542		18,834		(6,843	)		11,990		5,680
Towers Of Westchester Park, The	High Rise	Jan-06	College Park, MD		1972		303		1,209		37,588		656		1,209		38,244		39,453		(13,854	)		25,599		10,860
Township at Highlands	Town Home	Nov-96	Littleton, CO		1985		161		1,615		9,773		4,139		1,536		13,992		15,528		(4,659	)		10,868		15,965
Trails	Garden	Apr-02	Nashville, TN		1985		248		685		10,242		1,115		685		11,356		12,041		(5,502	)		6,539		8,651
Trails of Ashford	Garden	May-98	Houston, TX		1979		514		2,650		14,985		3,195		2,650		18,180		20,830		(7,097	)		13,733		7,000
Treetops	Garden	Mar-01	San Bruno, CA		1987		308		3,703		62,460		13,046		3,703		75,506		79,209		(29,725	)		49,484		26,060
Trinity Apartments	Garden	Dec-97	Irving, TX		1985		496		2,053		12,387		3,536		2,053		15,923		17,976		(5,159	)		12,817		4,995
Twin Lake Towers	High Rise	Oct-99	Westmont, IL		1969		399		2,636		19,461		5,494		2,636		24,955		27,591		(11,123	)		16,468		10,638

F-51


								(2)				(3)		December 31, 2006
		(1)						Initial Cost				Cost Capitalized								Accumulated			Total Cost
	Property	Date		Year		Number				Buildings and		Subsequent to				Buildings and				Depreciation			Net of
Property Name	Type	Consolidated	Location	Built		of Units		Land		Improvements		Acquisition		Land		Improvements		Total		(AD)			AD		Encumbrances

Twin Lakes Apartments	Garden	Apr-00	Palm Harbor, FL		1986		262		2,018		12,754		2,027		2,018		14,781		16,799		(5,636	)		11,163		9,827
Vantage Pointe	Mid Rise	Aug-02	Swampscott, MA		1987		96		4,749		10,089		747		4,749		10,836		15,585		(2,308	)		13,276		8,475
Verandahs at Hunt Club	Garden	Jul-02	Apopka, FL		1985		210		1,848		8,400		929		1,848		9,329		11,177		(1,324	)		9,853		6,922
Versailles	Garden	Apr-02	Fort Wayne, IN		1969		156		369		6,104		965		369		7,069		7,438		(2,767	)		4,671		2,180
Villa Del Sol	Garden	Mar-02	Norwalk, CA		1972		121		7,294		4,861		1,591		7,476		6,270		13,746		(1,413	)		12,333		4,678
Villa La Paz	Garden	Jun-98	Sun City, CA		1988		96		573		3,370		644		573		4,015		4,588		(1,251	)		3,336		2,632
Villa Nova Apartments	Garden	Apr-00	Indianapolis, IN		1972		126		626		3,720		1,207		626		4,927		5,553		(1,324	)		4,229		—
Village Creek at Brookhill	Garden	Jul-94	Westminster, CO		1987		324		2,446		13,261		3,636		2,446		16,898		19,343		(7,109	)		12,234		13,037
Village Crossing	Garden	May-98	W. Palm Beach, FL		1986		189		1,618		9,757		2,214		1,618		11,971		13,589		(4,093	)		9,496		7,000
Village East	Garden	Jul-00	Colorado Springs, CO		1972		137		906		5,807		1,369		906		7,177		8,083		(2,990	)		5,093		2,000
Village Gardens	Garden	Oct-99	Fort Collins, CO		1973		141		830		5,784		896		830		6,680		7,511		(2,757	)		4,754		3,773
Village Green Altamonte Springs	Garden	Oct-02	Altamonte Springs, FL		1970		164		570		6,564		1,242		570		7,806		8,375		(3,246	)		5,129		3,071
Village in the Woods	Garden	Jan-00	Cypress, TX		1983		530		2,213		16,975		8,506		2,213		25,481		27,694		(8,461	)		19,233		11,945
Village of Pennbrook	Garden	Oct-98	Levitown, PA		1969		722		5,562		42,392		10,008		5,562		52,400		57,962		(14,469	)		43,494		39,528
Village, The	Garden	Jan-00	Barndon, FL		1986		112		570		5,700		995		570		6,695		7,265		(2,627	)		4,638		5,292
Villages of Baymeadows	Garden	Oct-99	Jacksonville, FL		1972		904		4,521		35,166		35,407		4,521		70,573		75,094		(20,681	)		54,413		40,000
Villages of Bent Tree, Phase II	Garden	Jan-06	Indianapolis, IN		1983		280		1,072		12,770		229		1,072		12,999		14,072		(4,776	)		9,296		7,950
Villas at Little Turtle	Garden	Sep-00	Westerville, OH		1985		160		1,309		5,513		1,154		1,309		6,668		7,977		(1,679	)		6,298		5,558
Villas at Park La Brea, The	Garden	Mar-02	Los Angeles, CA		2002		250		8,621		48,871		1,234		8,621		50,105		58,726		(6,844	)		51,882		34,867
Vinings Peak	Garden	Jan-00	Atlanta, GA		1980		280		1,830		15,148		3,408		1,830		18,556		20,386		(7,241	)		13,145		7,496
Vista Del Lagos	Garden	Dec-97	Chandler, AZ		1986		200		804		4,952		2,141		804		7,092		7,896		(2,508	)		5,388		2,944
Vista Village	Garden	Jan-06	El Paso, TX		1972		220		618		8,122		91		618		8,212		8,830		(5,263	)		3,567		3,181
Walnut Springs	Garden	Dec-96	San Antonio, TX		1983		224		970		5,119		1,868		970		6,987		7,957		(3,257	)		4,700		3,206
Waterford Apartments, The	Garden	Nov-96	Houston, TX		1984		312		983		6,801		2,845		983		9,645		10,629		(2,865	)		7,764		4,268
Waterford Village	Garden	Aug-02	Bridgewater, MA		1971		588		28,585		28,102		2,001		28,585		30,103		58,688		(9,168	)		49,519		32,886
Watergate	Garden	Jan-06	Little Rock, AR		1979		140		402		7,436		379		402		7,815		8,217		(5,100	)		3,117		2,625
Waterways Village	Garden	Jun-97	Aventura, FL		1991		180		4,504		11,064		2,515		4,504		13,579		18,083		(4,774	)		13,309		8,959
Webb Bridge Crossing	Garden	Sep-04	Alpharetta, GA		1985		164		959		6,261		2,374		959		8,634		9,593		(2,743	)		6,850		5,157
West Lake Arms Apartments	Garden	Oct-99	Indianapolis, IN		1977		1,381		3,684		27,139		15,053		3,684		42,191		45,875		(13,108	)		32,767		9,273
West Winds	Garden	Mar-04	Columbia, SC		1981		100		501		3,968		511		501		4,479		4,980		(1,413	)		3,567		2,123
West Winds	Garden	Oct-02	Orlando, FL		1985		272		3,122		10,683		1,668		3,122		12,351		15,473		(2,707	)		12,765		6,664
West Woods	Garden	Oct-00	Anappolis, MD		1981		57		1,557		1,891		734		1,557		2,624		4,181		(677	)		3,504		1,651
Westgate	Garden	Oct-99	Houston, TX		1971		313		1,920		11,222		2,395		1,920		13,618		15,537		(3,971	)		11,567		7,411
Westway Village Apartments	Garden	May-98	Houston, TX		1979		326		2,921		11,384		1,302		2,921		12,686		15,607		(5,055	)		10,552		7,639
Wexford Village	Garden	Aug-02	Worcester, MA		1974		264		6,339		17,939		956		6,339		18,894		25,233		(4,457	)		20,776		13,677
Wickertree	Garden	Oct-97	Phoenix, AZ		1983		226		1,225		6,923		1,917		1,225		8,839		10,065		(3,050	)		7,015		2,985
Williams Cove	Garden	Jul-94	Irving, TX		1984		260		1,227		6,659		2,862		1,227		9,521		10,748		(4,020	)		6,728		4,200
Williamsburg	Garden	May-98	Rolling Meadows, IL		1985		329		2,717		15,437		3,875		2,717		19,312		22,029		(6,796	)		15,233		9,685
Williamsburg Manor	Garden	Apr-00	Cary, NC		1972		183		1,432		8,175		1,536		1,432		9,711		11,143		(3,545	)		7,597		5,104
Willow Park on Lake Adelaide	Garden	Oct-99	Altamonte Springs, FL		1972		185		880		7,687		2,305		880		9,993		10,872		(4,378	)		6,494		6,228
Willowick	Garden	Oct-99	Greenville, SC		1974		180		537		4,775		878		537		5,653		6,190		(2,748	)		3,442		2,597
Wilson Acres	Garden	Apr-06	Greenville, NC		1979		146		744		4,374		152		1,175		4,095		5,270		(99	)		5,170		3,119
Winchester Village Apartments	Garden	Nov-00	Indianapolis, IN		1966		96		104		2,234		819		104		3,053		3,157		(1,052	)		2,105		—
Winddrift (IN)	Garden	Oct-00	Indianapolis, IN		1980		166		1,265		3,912		1,805		1,265		5,717		6,982		(1,609	)		5,374		4,737
Windgate Place	Garden	May-99	Charlotte, NC		1972		196		1,044		5,900		212		1,044		6,112		7,156		(2,599	)		4,557		—
Windmere	Garden	Jan-03	Houston, TX		1982		257		2,171		10,917		650		2,171		11,566		13,737		(3,955	)		9,783		5,180
Windridge	Garden	May-98	San Antonio, TX		1983		276		1,406		8,272		1,283		1,406		9,555		10,962		(3,598	)		7,363		4,830
Windrift (CA)	Garden	Mar-01	Oceanside, CA		1987		404		24,960		17,590		6,750		24,960		24,340		49,300		(7,192	)		42,108		28,999
Windrift (FL)	Garden	Oct-00	Orlando, FL		1987		288		3,696		10,029		2,440		3,696		12,469		16,165		(3,306	)		12,859		14,944
Windsor at South Square	Garden	Oct-99	Durham, NC		1972		230		1,326		8,329		1,929		1,326		10,258		11,585		(3,563	)		8,022		4,397
Windsor Crossing	Garden	Mar-00	Newport News, VA		1978		156		307		2,110		1,451		307		3,561		3,867		(1,474	)		2,393		2,841

F-52


								(2)				(3)			December 31, 2006
		(1)						Initial Cost				Cost Capitalized									Accumulated			Total Cost
	Property	Date		Year		Number				Buildings and		Subsequent to					Buildings and				Depreciation			Net of
Property Name	Type	Consolidated	Location	Built		of Units		Land		Improvements		Acquisition			Land		Improvements		Total		(AD)			AD		Encumbrances

Windsor Park	Garden	Mar-01	Woodbridge, VA		1987		220		4,279		15,970		1,224			4,279		17,194		21,472		(4,267	)		17,206		13,758
Windward at the Villages	Garden	Oct-97	W. Palm Beach, FL		1988		196		1,595		9,079		2,916			1,595		11,995		13,590		(3,457	)		10,133		2,469
Wood Lake	Garden	Jan-00	Atlanta, GA		1983		220		1,399		13,123		3,279			1,399		16,403		17,802		(6,357	)		11,445		6,638
Wood View	Garden	Jan-06	Atlanta, GA		1983		180		1,340		4,868		161			1,340		5,029		6,369		(4,105	)		2,264		4,936
Woodcreek	Garden	Oct-02	Mesa, AZ		1985		432		2,187		15,971		1,766			2,187		17,737		19,924		(7,781	)		12,142		14,346
Woodfield Gardens	Garden	May-99	Charlotte, NC		1974		132		402		2,276		795			402		3,071		3,474		(1,362	)		2,112		—
Woodhollow	Garden	Oct-97	Austin, TX		1974		108		658		3,728		1,051			658		4,779		5,437		(1,750	)		3,687		1,508
Woodland Ridge	Garden	Dec-00	Irving, TX		1984		130		600		3,617		976			600		4,593		5,193		(2,013	)		3,180		2,562
Woods Edge	Garden	Nov-04	Indianapolis, IN		1981		190		495		6,238		873			495		7,111		7,606		(1,152	)		6,454		4,799
Woods of Burnsville	Garden	Nov-04	Burnsville, MN		1984		400		2,354		20,488		1,308			2,354		21,795		24,149		(6,828	)		17,321		16,580
Woods of Inverness	Garden	Oct-99	Houston, TX		1983		272		1,427		11,698		1,544			1,427		13,242		14,669		(5,958	)		8,711		4,186
Woods Of Williamsburg	Garden	Jan-06	Williamsburg, VA		1976		125		430		4,024		291			430		4,315		4,746		(2,658	)		2,088		1,445
Woodshire	Garden	Mar-00	Virginia Beach, VA		1972		288		961		5,549		2,410			961		7,959		8,920		(2,371	)		6,549		6,632
Wyntre Brook Apartments	Garden	Oct-99	West Chester, PA		1976		212		1,010		9,283		10,234			1,010		19,517		20,527		(4,622	)		15,905		9,544
Yorktown II Apartments	High Rise	Dec-99	Lombard, IL		1973		368		2,971		18,163		5,951			2,971		24,114		27,085		(4,086	)		22,999		15,279
Yorktree	Garden	Oct-97	Carolstream, IL		1972		293		1,968		11,457		3,549			1,968		15,006		16,974		(5,379	)		11,595		4,807


Total Conventional Properties							134,557		2,245,689		6,337,697		1,884,182			2,294,323		8,173,245		10,467,568		(2,410,198	)		8,057,370		5,466,111


Affordable Properties
Adams Court	Garden	Jan-06	Hempstead, NY		1981		84		94		6,047		63			94		6,110		6,204		(3,402	)		2,802		2,649
All Hallows	Garden	Jan-06	San Francisco, CA		1976		157		558		27,144		741			558		27,885		28,443		(10,222	)		18,221		2,806
Alliance Towers	High Rise	Mar-02	Lombard, IL		1971		101		530		1,934		572			530		2,506		3,036		(450	)		2,586		2,274
Arrowsmith	Garden	Mar-02	Corpus Christi, TX		1980		70		240		968		433			240		1,401		1,641		(364	)		1,277		1,362
Arvada House	High Rise	Nov-04	Arvada, CO		1977		88		641		3,314		1,671			405		5,221		5,627		(690	)		4,937		4,245
Ashland Manor	High Rise	Mar-02	East Moline, IL		1977		189		205		1,162		756			205		1,918		2,123		(372	)		1,751		1,109
Aspen Stratford B	High Rise	Oct-02	Newark, NJ		1920		60		362		2,887		697			362		3,584		3,945		(1,963	)		1,983		1,788
Aspen Stratford C	High Rise	Oct-02	Newark, NJ		1920		55		363		2,818		700			363		3,519		3,881		(1,895	)		1,986		1,576
Baisley Park Gardens	Mid Rise	Apr-02	Jamaica, NY		1982		212		1,765		12,309		2,992			1,765		15,301		17,065		(3,900	)		13,166		11,655
Baldwin Oaks	Mid Rise	Oct-99	Parsippany ,NJ		1980		251		746		8,516		1,217			746		9,733		10,479		(5,112	)		5,367		6,459
Baldwin Towers	High Rise	Jan-06	Pittsburgh, PA		1983		99		237		5,417		98			237		5,515		5,752		(3,222	)		2,531		2,266
Bangor House	High Rise	Mar-02	Bangor, ME		1979		121		1,140		4,595		702			1,140		5,296		6,436		(779	)		5,658		2,937
Bannock Arms	Garden	Mar-02	Boise, ID		1978		66		275		1,139		390			275		1,529		1,804		(319	)		1,485		1,439
Bayview	Garden	Jun-05	San Francisco, CA		1976		146		241		19,548		279			241		19,827		20,068		(6,704	)		13,364		2,440
Beacon Hill	High Rise	Mar-02	Hillsdale, MI		1980		198		1,380		5,524		1,378			1,380		6,902		8,282		(1,563	)		6,719		5,329
Bedford House	Mid Rise	Mar-02	Falmouth, KY		1979		48		230		919		190			230		1,109		1,339		(254	)		1,085		1,096
Benjamin Banneker Plaza	Mid Rise	Jan-06	Chester, PA		1976		70		79		4,236		289			79		4,525		4,604		(2,179	)		2,425		1,642
Berger Apartments	Mid Rise	Mar-02	New Haven, CT		1981		145		1,152		4,657		1,393			1,152		6,049		7,201		(1,265	)		5,936		2,250
Biltmore Towers	High Rise	Mar-02	Dayton, OH		1980		230		1,813		6,411		12,451			1,813		18,862		20,675		(3,486	)		17,189		10,802
Blakewood	Garden	Oct-05	Statesboro, GA		1973		42		23		1,187		251			23		1,438		1,461		(845	)		616		766
Bloomsburg Towers	Mid Rise	Jan-06	Bloomsburg, PA		1981		75		1		4,128		62			1		4,190		4,191		(2,377	)		1,813		1,641
Bolton North	High Rise	Jan-06	Baltimore, MD		1977		209		481		8,796		144			481		8,941		9,422		(5,083	)		4,339		2,999
Brightwood Manor	Garden	Jan-06	New Brighton, PA		1975		152		140		5,164		129			140		5,293		5,433		(3,193	)		2,240		1,554
Broadmoor	Garden	Jan-06	Riviera Beach, FL		1972		182		95		6,571		186			95		6,757		6,852		(4,094	)		2,758		1,014
Brunswick House	Mid Rise	Jan-06	Brunswick, MD		1980		52		79		2,828		60			79		2,889		2,967		(1,589	)		1,379		1,112
Butternut Creek	Mid Rise	Jan-06	Charlotte, MI		1980		100		702		4,215		117			702		4,332		5,035		(2,578	)		2,457		966
Cache Creek Apartment Homes	Mid Rise	Jun-04	Clearlake, CA		1986		80		1,545		9,405		416			1,545		9,821		11,366		(1,487	)		9,879		2,355
California Square I	High Rise	Jan-06	Louisville, KY		1982		101		154		5,704		152			154		5,855		6,010		(2,938	)		3,072		3,587
California Square II	Garden	Jan-06	Louisville, KY		1983		48		61		2,156		118			61		2,275		2,336		(1,268	)		1,068		1,585
Campbell Heights	High Rise	Oct-02	Washington, D.C.		1978		170		750		6,719		533			750		7,252		8,002		(2,061	)		5,942		8,067
Canterbury Towers	High Rise	Jan-06	Worcester, MA		1976		157		400		4,724		506			400		5,230		5,630		(2,732	)		2,898		6,105
Carriage House (VA)	Mid Rise	Dec-06	Petersburg, VA		1885		118		847		2,886		(0	)		847		2,886		3,733		(81	)		3,651		1,335

F-53


								(2)				(3)			December 31, 2006
		(1)						Initial Cost				Cost Capitalized									Accumulated			Total Cost
	Property	Date		Year		Number				Buildings and		Subsequent to					Buildings and				Depreciation			Net of
Property Name	Type	Consolidated	Location	Built		of Units		Land		Improvements		Acquisition			Land		Improvements		Total		(AD)			AD		Encumbrances

Casa de Las Hermanitas	Garden	Mar-02	Los Angeles, CA		1982		88		1,800		4,143		384			1,800		4,528		6,328		(844	)		5,484		1,763
Castle Park	Mid Rise	Mar-02	St. Louis, MO		1983		209		1,710		6,896		2,461			1,710		9,357		11,067		(2,041	)		9,026		9,009
Castlewood	Garden	Mar-02	Davenport, IA		1980		96		585		2,351		1,081			585		3,432		4,017		(712	)		3,305		3,548
Centennial	Garden	Mar-02	Fort Wayne, IN		1983		88		550		2,207		664			550		2,871		3,421		(701	)		2,720		2,970
Cherry Ridge Terrace	Garden	Mar-02	Northern Cambria, PA		1983		62		372		1,490		477			372		1,967		2,339		(479	)		1,860		1,223
City Line	Garden	Mar-02	Hampton, VA		1976		200		500		2,014		8,083			500		10,097		10,597		(813	)		9,784		5,068
Clinton Manor	Garden	Jan-06	Clinton, SC		1980		60		53		2,706		22			53		2,729		2,781		(2,153	)		628		890
Clisby Towers	Mid Rise	Jan-06	Macon, GA		1980		52		161		2,333		16			161		2,350		2,510		(1,539	)		972		1,087
Coatesville Towers	High Rise	Mar-02	Coatesville, PA		1979		90		500		2,011		430			500		2,441		2,941		(539	)		2,402		2,210
Community Circle II	Garden	Jan-06	Cleveland, OH		1975		129		210		4,751		111			210		4,863		5,073		(2,580	)		2,493		3,281
Copperwood I Apartments	Garden	Apr-06	The Woodlands, TX		1980		150		390		8,373		3,683			369		12,077		12,446		(2,370	)		10,075		5,660
Copperwood II Apartments	Garden	Oct-05	The Woodlands, TX		1981		150		452		5,552		1,549			425		7,128		7,554		(920	)		6,634		5,840
Country Club Heights	Garden	Mar-04	Quincy, IL		1976		200		676		5,715		4,715			676		10,430		11,106		(2,120	)		8,986		8,099
Country Commons	Garden	Jan-06	Bensalem, PA		1972		352		1,314		18,196		101			1,314		18,297		19,610		(7,969	)		11,642		6,797
Courtyard	Mid Rise	Jan-06	Cincinnati, OH		1980		137		642		5,597		40			642		5,637		6,278		(2,614	)		3,664		3,944
Creekside Gardens	Garden	Mar-02	Loveland, CO		1983		50		350		1,401		320			350		1,722		2,072		(492	)		1,579		1,735
Creekview	Garden	Mar-02	Stroudsburg, PA		1982		80		400		1,610		514			400		2,124		2,524		(396	)		2,128		2,764
Crevenna Oaks	Town Home	Jan-06	Burke, VA		1979		50		355		3,539		109			355		3,648		4,003		(1,860	)		2,143		1,302
Crockett Manor	Garden	Mar-04	Trenton, TN		1982		38		42		1,395		39			42		1,433		1,476		(101	)		1,375		978
Cumberland Court	Garden	Jan-06	Harrisburg, PA		1975		108		170		4,249		108			170		4,357		4,526		(2,683	)		1,844		1,538
Daugette Tower	High Rise	Mar-02	Gadsden, AL		1979		101		540		2,178		1,121			540		3,300		3,840		(733	)		3,106		753
Delhaven Manor	Mid Rise	Mar-02	Jackson, MS		1983		104		575		2,304		1,450			575		3,754		4,329		(731	)		3,598		3,809
Denny Place	Garden	Mar-02	North Hollywood, CA		1984		17		394		1,579		93			394		1,671		2,066		(294	)		1,771		1,147
Druid Hills	Garden	Jan-06	Walterboro, SC		1981		80		76		3,718		29			76		3,747		3,823		(2,780	)		1,043		1,358
East Central Towers	Mid Rise	Mar-02	Fort Wayne, IN		1980		167		800		3,203		416			800		3,619		4,419		(618	)		3,801		3,172
East Farm Village	High Rise	Mar-02	East Haven, CT		1981		240		2,800		11,188		1,778			2,800		12,965		15,765		(2,261	)		13,505		8,515
Echo Valley	Mid Rise	Mar-02	West Warwick, RI		1978		100		550		2,294		1,794			550		4,087		4,637		(859	)		3,779		4,267
Elmwood	Garden	Jan-06	Athens, AL		1981		80		185		2,804		130			185		2,934		3,119		(1,336	)		1,783		1,898
Fairburn And Gordon II	Garden	Jan-06	Atlanta, GA		1969		58		84		2,002		66			84		2,068		2,152		(1,200	)		952		235
Fairwood	Garden	Jan-06	Carmichael, CA		1979		86		166		5,275		125			166		5,400		5,566		(2,861	)		2,705		2,743
Fleetwood Manor	Garden	Jan-06	Greenville, SC		1980		100		238		3,623		38			238		3,661		3,899		(2,091	)		1,808		1,278
Fountain Place	Mid Rise	Jan-06	Connersville, IN		1980		102		423		3,193		47			423		3,240		3,663		(1,717	)		1,946		1,937
Fox Run (TX)	Garden	Mar-02	Orange, TX		1983		70		420		1,992		(0	)		420		1,992		2,412		(410	)		2,002		1,675
Foxfire (MI)	Garden	Jan-06	Jackson, MI		1975		160		782		6,927		499			782		7,427		8,209		(4,020	)		4,189		2,321
Franklin Square School Apts	Mid Rise	Jan-06	Baltimore, MD		1888		65		46		4,100		52			46		4,152		4,199		(1,758	)		2,440		2,276
Friendset Apartments	High Rise	Jan-06	Brooklyn, NY		1979		259		550		16,825		1,364			550		18,188		18,739		(8,379	)		10,360		7,538
Friendship Arms	Mid Rise	Mar-02	Hyattsville, MD		1979		151		970		3,887		897			970		4,784		5,754		(1,152	)		4,602		5,196
Friendship Court	Garden	Jan-06	Anderson, SC		1972		80		191		1,734		1			191		1,735		1,926		(216	)		1,710		—
Frio	Garden	Jan-06	Pearsall, TX		1980		63		109		2,425		141			109		2,566		2,675		(1,357	)		1,318		1,109
Gary Manor	High Rise	Mar-02	Gary, IN		1980		198		1,090		4,370		768			1,090		5,138		6,228		(931	)		5,297		5,297
Gates Manor	Garden	Mar-04	Clinton, TN		1981		80		266		2,225		291			266		2,516		2,782		(785	)		1,997		2,447
Gateway Village	Garden	Mar-04	Hillsborough, NC		1980		64		433		1,666		202			433		1,868		2,301		(352	)		1,948		1,525
Gholson Hotel	Mid Rise	Mar-02	Ranger, TX		1984		50		325		1,334		914			325		2,249		2,574		(303	)		2,271		2,132
Glendale Terrace	Garden	Jan-06	Aiken, SC		1972		60		38		1,554		15			38		1,570		1,608		(1,078	)		531		221
Greenbriar	Garden	Jan-06	Indianapolis, IN		1980		120		762		4,083		42			762		4,125		4,887		(2,404	)		2,483		1,462
Hamlin Estates	Garden	Mar-02	North Hollywood, CA		1983		30		1,010		1,691		133			1,010		1,824		2,834		(358	)		2,476		1,742
Hanover Square	High Rise	Jan-06	Baltimore, MD		1980		199		369		10,862		81			369		10,943		11,312		(5,338	)		5,974		6,283
Harris Park Apartments	Garden	Dec-97	Rochester, NY		1968		114		475		2,786		952			475		3,738		4,212		(1,479	)		2,733		601
Hatillo Housing	Mid Rise	Jan-06	Hatillo, PR		1982		64		177		2,901		37			177		2,938		3,115		(1,474	)		1,641		1,400
Hemet Estates	Garden	Mar-02	Hemet, CA		1983		80		700		2,802		2,367			652		5,217		5,869		(573	)		5,297		4,581
Heritage House	Mid Rise	Jan-06	Lewisburg, PA		1982		79		178		3,251		48			178		3,299		3,477		(1,706	)		1,771		2,140

F-54


								(2)				(3)		December 31, 2006
		(1)						Initial Cost				Cost Capitalized								Accumulated			Total Cost
	Property	Date		Year		Number				Buildings and		Subsequent to				Buildings and				Depreciation			Net of
Property Name	Type	Consolidated	Location	Built		of Units		Land		Improvements		Acquisition		Land		Improvements		Total		(AD)			AD		Encumbrances

Heritage Square	Garden	Mar-02	Texas City, TX		1983		50		668		859		336		668		1,195		1,863		(285	)		1,578		1,512
Hickory Heights	Garden	Jan-06	Abbeville, SC		1974		80		25		2,479		62		25		2,541		2,566		(1,551	)		1,015		443
Highlawn Place	High Rise	Mar-02	Huntington, WV		1977		133		550		2,204		718		550		2,922		3,472		(479	)		2,993		2,051
Hillcrest Green	Garden	Jan-06	Oklahoma City, OK		1973		96		204		3,264		50		204		3,314		3,518		(2,029	)		1,489		1,006
Hillside Village	Town Home	Jan-06	Catawissa, PA		1981		50		31		2,643		19		31		2,662		2,693		(1,440	)		1,252		1,240
Hilltop	Garden	Jan-06	Duquesne, PA		1975		152		153		7,311		119		153		7,431		7,584		(4,532	)		3,052		2,456
Hopkins Village	Mid Rise	Sep-03	Baltimore, MD		1979		165		857		4,207		834		857		5,041		5,897		(2,651	)		3,246		2,994
Hudson Gardens	Garden	Mar-02	Pasadena, CA		1983		41		914		1,548		168		914		1,716		2,631		(364	)		2,266		870
Hudson Terrace	Garden	Jan-06	Hudson, NY		1973		168		242		5,431		76		242		5,506		5,748		(3,184	)		2,564		1,474
Indio Gardens	Mid Rise	Oct-06	Indio, CA		1980		151		—		9,705		—		—		9,705		9,705		—			9,705		6,400
Ingram Square	Garden	Jan-06	San Antonio, TX		1980		120		285		4,513		276		285		4,789		5,074		(2,369	)		2,705		2,664
Jenny Lind Hall	High Rise	Mar-04	Springfield, MO		1977		78		142		3,684		197		142		3,881		4,023		(175	)		3,848		1,099
JFK Towers	Mid Rise	Jan-06	Durham, NC		1983		177		335		8,386		75		335		8,461		8,795		(3,803	)		4,993		5,956
Kalmia	Garden	Jan-06	Graniteville, SC		1981		96		103		4,692		26		103		4,718		4,821		(3,066	)		1,755		1,974
Kephart Plaza	High Rise	Jan-06	Lock Haven, PA		1978		101		52		4,353		52		52		4,405		4,457		(2,522	)		1,935		1,775
King Bell Apartments	Garden	Jan-06	Milwaukie, OR		1982		62		204		2,497		86		204		2,583		2,787		(1,190	)		1,597		1,723
Kirkwood House	High Rise	Sep-04	Baltimore, MD		1979		261		1,746		6,663		443		1,746		7,106		8,852		(3,212	)		5,640		4,413
Kubasek Trinity Manor (The Hollows)	High Rise	Jan-06	Yonkers, NY		1981		130		8		8,354		202		8		8,555		8,563		(4,665	)		3,898		4,953
Lafayette Commons	Garden	Mar-04	West Lafayette, OH		1979		49		187		1,012		169		187		1,181		1,368		(168	)		1,201		873
Lafayette Square	Garden	Jan-06	Camden, SC		1978		72		64		1,953		23		64		1,976		2,039		(1,499	)		541		368
Lakeview Arms	Mid Rise	Jan-06	Poughkeepsie, NY		1981		72		111		3,256		119		111		3,375		3,486		(1,783	)		1,703		2,018
Landau	Garden	Oct-05	Clinton, SC		1970		80		47		2,837		78		47		2,915		2,962		(1,593	)		1,369		429
Lasalle	Garden	Oct-00	San Francisco, CA		1976		145		1,256		10,686		8,314		1,256		18,999		20,255		(5,269	)		14,986		3,116
Laurelwood	Garden	Jan-06	Morristown, TN		1981		65		75		1,870		85		75		1,955		2,030		(1,076	)		954		1,320
Laurens Villa	Garden	Jan-06	Laurens, SC		1980		60		53		2,540		275		53		2,816		2,868		(1,707	)		1,161		1,376
Lavista	Garden	Jan-06	Concord, CA		1981		75		565		5,073		144		565		5,218		5,783		(2,899	)		2,883		1,967
Leona	Garden	Dec-97	Uvalde, TX		1973		40		100		524		452		100		976		1,076		(469	)		607		372
Lock Haven Gardens	Garden	Jan-06	Lock Haven, PA		1979		150		169		7,040		121		169		7,161		7,330		(3,752	)		3,577		3,410
Locust House	High Rise	Mar-02	Westminster, MD		1979		99		650		2,604		463		650		3,067		3,717		(716	)		3,001		2,739
Lodge Run	Mid Rise	Jan-06	Portage, PA		1983		31		18		1,467		158		18		1,625		1,643		(1,040	)		603		580
Long Meadow	Garden	Jan-06	Cheraw, SC		1973		56		28		1,472		32		28		1,504		1,532		(986	)		546		286
Loring Towers (MN)	High Rise	Oct-02	Minneapolis, MN		1975		230		1,297		7,445		7,693		913		15,522		16,435		(3,297	)		13,138		8,222
Loring Towers Apartments	High Rise	Sep-03	Salem, MA		1973		250		727		7,740		2,715		727		10,454		11,182		(4,961	)		6,221		4,749
Lynnhaven	Garden	Mar-04	Durham, NC		1980		75		539		2,159		353		539		2,512		3,051		(375	)		2,676		1,981
Maria Lopez Plaza	Mid Rise	Jan-06	Bronx, NY		1982		216		498		17,754		170		498		17,924		18,422		(9,194	)		9,228		10,953
Mill Pond	Mid Rise	Jan-06	Tauton, MA		1982		49		70		2,714		124		70		2,838		2,908		(1,323	)		1,585		1,841
Miramar Housing	High Rise	Jan-06	Ponce, PR		1983		96		290		5,162		30		290		5,192		5,482		(2,558	)		2,924		3,116
Montblanc Gardens	Town Home	Dec-03	Yauco, PR		1982		128		391		3,859		726		391		4,584		4,975		(1,944	)		3,031		3,347
Morrisania II	High Rise	Jan-06	Bronx, NY		1979		203		404		16,038		398		404		16,436		16,840		(8,619	)		8,220		8,319
Moss Gardens	Mid Rise	Jan-06	Lafayette, LA		1980		114		125		4,218		61		125		4,278		4,403		(2,804	)		1,599		2,145
New Baltimore	Mid Rise	Mar-02	New Baltimore, MI		1980		101		888		2,360		—		888		2,360		3,248		(410	)		2,838		—
New Vistas I	Garden	Jan-06	Chicago, IL		1925		148		181		7,388		41		181		7,428		7,609		(5,072	)		2,537		1,825
Newberry Arms	Garden	Jan-06	Newberry, SC		1979		60		84		2,728		17		84		2,745		2,829		(1,780	)		1,048		872
Newberry Park	Garden	Dec-97	Chicago, IL		1985		84		1,150		7,862		373		1,150		8,236		9,386		(2,033	)		7,353		7,678
Northlake Village	Garden	Oct-00	Lima, OH		1971		150		487		1,317		1,177		487		2,494		2,980		(992	)		1,988		1,012
Northpoint	Garden	Jan-00	Chicago, IL		1921		304		2,280		14,334		15,176		2,510		29,279		31,789		(7,395	)		24,395		20,807
Northwinds, The	Garden	Mar-02	Wytheville, VA		1978		144		500		2,012		1,011		500		3,024		3,524		(761	)		2,763		1,945
Oakwood Apartments	Town Home	Mar-04	Cuthbert, GA		1982		50		188		1,058		398		188		1,456		1,644		(517	)		1,127		1,725
Oakwood Gardens	High Rise	Jan-06	Mount Vernon, NY		1930		100		202		8,733		259		202		8,992		9,194		(3,686	)		5,508		4,401
Oakwood Manor	Garden	Mar-04	Milan, TN		1984		34		95		498		28		95		527		622		(97	)		525		439

F-55


								(2)				(3)			December 31, 2006
		(1)						Initial Cost				Cost Capitalized									Accumulated			Total Cost
	Property	Date		Year		Number				Buildings and		Subsequent to					Buildings and				Depreciation			Net of
Property Name	Type	Consolidated	Location	Built		of Units		Land		Improvements		Acquisition			Land		Improvements		Total		(AD)			AD		Encumbrances

Ocala Place	Garden	Jan-06	Ocala, FL		1980		40		93		1,420		192			93		1,612		1,705		(829	)		876		626
Olde Towne West I	Mid Rise	Jan-06	Alexandria, VA		1976		172		130		5,664		1,558			130		7,222		7,351		(3,714	)		3,637		8,715
Olde Towne West II	Garden	Oct-02	Alexandria, VA		1977		72		214		2,865		481			214		3,346		3,560		(1,443	)		2,117		2,735
Olde Towne West III	Garden	Apr-00	Alexandria, VA		1978		75		581		3,463		1,435			581		4,898		5,479		(1,319	)		4,160		3,476
O’Neil	High Rise	Jan-06	Troy, NY		1978		115		77		4,078		427			77		4,506		4,583		(2,826	)		1,757		1,633
Orange Village	Garden	Jan-06	Hermitage, PA		1979		81		53		3,432		97			53		3,529		3,582		(1,962	)		1,619		1,880
Orangeburg Manor	Garden	Jan-06	Orangeburg, SC		1979		100		150		2,934		269			150		3,202		3,352		(2,001	)		1,351		1,263
Overbrook Park	Garden	Jan-06	Chillicothe, OH		1981		50		109		2,309		73			109		2,381		2,490		(1,144	)		1,347		1,489
Oxford House	Mid Rise	Mar-02	Deactur, IL		1979		156		993		4,164		332			993		4,495		5,488		(1,062	)		4,426		3,589
Palm Springs Senior	Garden	Mar-02	Palm Springs, CA		1981		116		—		8,745		(0	)		—		8,745		8,745		(1,347	)		7,398		7,330
Panorama Park	Garden	Mar-02	Bakersfield, CA		1982		66		570		2,288		325			570		2,613		3,183		(610	)		2,573		2,318
Parc Chateau I	Garden	Jan-06	Lithonia, GA		1973		86		124		3,349		53			124		3,402		3,526		(2,140	)		1,386		630
Parc Chateau II	Garden	Jan-06	Lithonia, GA		1974		88		147		3,414		45			147		3,459		3,606		(2,214	)		1,392		634
Park Avenue Towers (PA)	Garden	Oct-00	Wilkes-Barre, PA		1978		130		292		2,546		535			292		3,080		3,373		(1,449	)		1,924		2,195
Park Place	Mid Rise	Jun-05	St Louis, MO		1977		242		742		6,327		7,386			722		13,733		14,456		(1,794	)		12,662		9,970
Park Place Texas	Garden	Mar-02	Cleveland, TX		1983		60		390		1,587		360			390		1,948		2,338		(388	)		1,950		1,877
Park Vista	Garden	Oct-05	Anaheim, CA		1958		392		7,727		26,779		1,046			7,727		27,824		35,551		(5,396	)		30,156		38,024
Parkview	Garden	Mar-02	Sacramento, CA		1980		97		1,060		4,240		974			1,060		5,214		6,274		(1,015	)		5,259		2,681
Parkways, The	Garden	Jun-04	Chicago, IL		1925		446		3,684		23,257		13,320			3,431		36,830		40,261		(5,461	)		34,800		23,859
Patman Switch	Garden	Jan-06	Hughes Springs, TX		1978		82		202		1,906		516			202		2,423		2,625		(1,350	)		1,275		1,247
Pavillion	High Rise	Mar-04	Philadelphia, PA		1976		296		—		15,416		387			—		15,803		15,803		(1,940	)		13,863		10,080
Pine Haven Villas	Garden	Jan-06	Columbia, SC		1981		80		116		4,018		38			116		4,055		4,172		(2,371	)		1,801		1,711
Pinebluff Village	Mid Rise	Jan-06	Salisbury, MD		1980		151		291		7,998		222			291		8,220		8,511		(4,952	)		3,559		2,457
Pinewood Place	Garden	Mar-02	Toledo, OH		1979		99		420		1,698		942			420		2,639		3,059		(634	)		2,425		2,023
Pleasant Hills	Garden	Apr-05	Austin, TX		1982		100		1,188		2,631		3,244			1,229		5,833		7,062		(639	)		6,424		3,255
Plummer Village	Mid Rise	Mar-02	North Hills, CA		1983		75		624		2,647		697			624		3,344		3,968		(710	)		3,258		—
Portland Plaza	Garden	Jan-06	Louisville, KY		1983		71		—		2,926		49			—		2,976		2,976		(1,529	)		1,447		1,543
Portner Place	Town Home	Jan-06	Washington, DC		1980		48		1		3,558		15			1		3,573		3,574		(2,173	)		1,400		1,467
Post Street Apartments	High Rise	Jan-06	Yonkers, NY		1930		56		104		3,359		299			104		3,658		3,762		(1,913	)		1,849		1,806
Pride Gardens	Garden	Dec-97	Flora, MS		1975		76		102		1,071		1,395			102		2,466		2,568		(1,002	)		1,566		1,122
Rancho California	Garden	Jan-06	Temecula, CA		1984		55		356		5,594		91			356		5,685		6,041		(2,047	)		3,995		2,118
Renwick Gardens	High Rise	Jan-06	New York, NY		1979		224		402		17,402		1,437			402		18,839		19,241		(9,247	)		9,994		22,987
Ridgewood (La Loma)	Garden	Mar-02	Sacramento, CA		1980		75		700		2,804		501			700		3,305		4,005		(614	)		3,391		1,936
Ridgewood Towers	High Rise	Mar-02	East Moline, IL		1977		140		698		2,803		455			698		3,258		3,955		(732	)		3,223		1,899
River Village	High Rise	Jan-06	Flint, MI		1980		340		1,639		13,994		380			1,639		14,373		16,012		(7,112	)		8,900		8,496
River’s Edge	Town Home	Jan-06	Greenville, MI		1983		49		205		2,203		51			205		2,254		2,459		(1,400	)		1,059		993
Riverwoods	High Rise	Jan-06	Kankakee, IL		1983		125		254		8,362		83			254		8,445		8,699		(4,156	)		4,543		3,751
Robbie Robinson	Garden	Oct-05	Savannah, GA		1921		100		554		3,097		127			554		3,223		3,777		(272	)		3,505		3,200
Rosedale Court Apartments	Garden	Mar-04	Dawson Springs, KY		1981		40		194		1,177		114			194		1,291		1,485		(372	)		1,113		919
Round Barn	Garden	Mar-02	Champaign, IL		1979		156		1,015		4,387		549			1,015		4,936		5,951		(1,142	)		4,809		3,746
Ruscombe Gardens	Mid Rise	Jan-06	Baltimore, MD		1983		151		215		8,985		47			215		9,032		9,247		(4,399	)		4,848		3,651
Rutherford Park	Town Home	Jan-06	Hummelstown, PA		1981		85		376		4,814		46			376		4,859		5,235		(2,451	)		2,784		2,915
San��Jose Apartments	Garden	Sep-05	San Antonio, TX		1970		220		404		5,770		14			404		5,783		6,187		(569	)		5,618		—
San Juan Del Centro	Mid Rise	Sep-05	Boulder, CO		1971		150		243		7,110		1			243		7,110		7,354		(774	)		6,580		12,362
Sandy Hill Terrace	High Rise	Mar-02	Norristown, PA		1980		175		1,650		6,599		1,664			1,650		8,263		9,913		(1,661	)		8,252		4,244
Sandy Springs	Garden	Mar-05	Macon, GA		1979		74		153		1,736		505			153		2,241		2,393		(1,200	)		1,193		2,150
School Street	Mid Rise	Jan-06	Taunton, MA		1920		75		181		4,373		272			181		4,645		4,826		(2,267	)		2,559		3,842
Sharp-Leadenhall I	Town Home	Mar-04	Baltimore, MD		1981		155		1,399		5,434		570			1,399		6,004		7,403		(1,423	)		5,980		5,656
Sharp-Leadenhall II	Town Home	Sep-03	Baltimore, MD		1981		37		171		1,636		270			171		1,906		2,076		(827	)		1,249		1,140
Sheraton Towers	High Rise	Mar-02	High Point, NC		1981		97		525		2,159		711			525		2,870		3,395		(527	)		2,868		3,292
Sherman Hills	High Rise	Jan-06	Wilkes-Barre, PA		1976		344		1,118		16,470		60			1,118		16,530		17,649		(12,423	)		5,226		3,923

F-56


								(2)				(3)		December 31, 2006
		(1)						Initial Cost				Cost Capitalized								Accumulated			Total Cost
	Property	Date		Year		Number				Buildings and		Subsequent to				Buildings and				Depreciation			Net of
Property Name	Type	Consolidated	Location	Built		of Units		Land		Improvements		Acquisition		Land		Improvements		Total		(AD)			AD		Encumbrances

Shoreview	Garden	Oct-99	San Francisco, CA		1976		156		633		8,610		10,151		633		18,761		19,394		(5,987	)		13,407		3,281
South Bay Villa	Garden	Mar-02	Los Angeles, CA		1981		80		663		2,770		3,456		659		6,230		6,889		(1,048	)		5,842		—
South Park	Garden	Mar-02	Elyria, OH		1970		138		200		931		1,838		200		2,769		2,969		(557	)		2,412		602
Spring Manor	Mid Rise	Jan-06	Holidaysburg, PA		1983		51		117		2,574		252		117		2,826		2,943		(1,863	)		1,079		1,019
St. George Villas	Garden	Jan-06	St. George, SC		1984		40		82		1,029		29		82		1,058		1,140		(616	)		524		565
Sterling Village	Town Home	Mar-02	San Bernadino, CA		1983		80		549		3,459		1,575		549		5,034		5,583		(527	)		5,056		4,481
Stonegate Village	Garden	Oct-00	New Castle, IN		1970		122		313		1,895		782		322		2,668		2,991		(631	)		2,360		567
Strawbridge Square	Garden	Oct-99	Alexandria, VA		1979		128		662		3,508		2,614		662		6,122		6,783		(1,495	)		5,288		7,196
Sumler Terrace	Garden	Jan-06	Norfolk, VA		1976		126		215		4,400		56		215		4,456		4,671		(3,075	)		1,596		1,591
Summit Oaks	Town Home	Jan-06	Burke, VA		1980		50		382		3,940		75		382		4,015		4,397		(1,944	)		2,453		1,648
Suntree	Garden	Jan-06	St. Johns, MI		1980		121		377		6,513		145		377		6,659		7,036		(3,442	)		3,594		2,023
Swift Creek	Garden	Jan-06	Hartsville, SC		1981		72		105		3,470		174		105		3,643		3,749		(2,423	)		1,326		1,638
Tabor Towers	Mid Rise	Jan-06	Lewisburg, WV		1979		84		155		3,369		46		155		3,415		3,570		(1,780	)		1,790		2,034
Tamarac Pines Apartments I	Garden	Nov-04	Woodlands, TX		1980		144		140		2,775		3,378		365		5,927		6,292		(1,037	)		5,255		4,376
Tamarac Pines Apartments II	Garden	Nov-04	Woodlands, TX		1980		156		142		3,195		3,668		266		6,738		7,004		(1,165	)		5,839		4,741
Terraces	Mid Rise	Jan-06	Kettering, OH		1979		102		503		3,873		36		503		3,910		4,412		(2,208	)		2,204		2,561
Terry Manor	Mid Rise	Oct-05	Los Angeles, CA		1977		170		1,775		5,848		3,873		1,745		9,751		11,496		(399	)		11,097		—
The Club	Garden	Jan-06	Lexington, NC		1972		87		66		2,560		112		66		2,672		2,738		(1,525	)		1,213		481
The Glens	Garden	Jan-06	Rock Hill, SC		1982		88		90		4,885		215		90		5,099		5,189		(2,882	)		2,307		2,341
Tompkins Terrace	Garden	Oct-02	Beacon, NY		1974		193		872		4,943		1,158		872		6,102		6,974		(1,225	)		5,749		2,617
Trestletree Village	Garden	Mar-02	Atlanta, GA		1981		188		1,150		4,655		753		1,150		5,408		6,558		(1,314	)		5,244		3,796
Twentynine Palms	Garden	Mar-02	Twenty-Nine Palms, CA		1983		48		311		1,247		381		311		1,628		1,939		(401	)		1,538		1,423
United Front Homes	Garden	Oct-06	New Bedford, MA		1900		200		1,792		16,170		—		1,792		16,170		17,963		(3,880	)		14,082		4,065
United House	High Rise	Jan-06	Scranton, PA		1978		91		236		3,818		25		236		3,842		4,078		(2,380	)		1,699		2,260
University Square	High Rise	Mar-05	Philadelphia, PA		1978		442		263		12,708		8,141		263		20,849		21,113		(3,714	)		17,399		14,217
Van Nuys Apartments	High Rise	Mar-02	Los Angeles, CA		1981		299		4,337		16,377		1,602		4,337		17,979		22,316		(3,171	)		19,145		16,738
Vantage ’78	Garden	Jan-06	Charlotte, NC		1957		168		656		5,732		143		656		5,874		6,530		(3,255	)		3,275		2,513
Victory Square	Garden	Mar-02	Canton, OH		1975		81		215		889		299		215		1,188		1,403		(354	)		1,049		895
Villa Hermosa Apartments	Mid Rise	Oct-02	New York, NY		1920		272		1,815		10,312		2,906		1,815		13,217		15,033		(4,661	)		10,371		7,308
Village Oaks	Mid Rise	Jan-06	Catonsville, MD		1980		181		1,156		6,160		1,408		1,156		7,567		8,723		(3,935	)		4,788		5,083
Village of Kaufman	Garden	Mar-05	Kaufman, TX		1981		68		370		1,606		63		370		1,669		2,039		(357	)		1,682		1,376
Vista Park Chino	Garden	Mar-02	Chino, CA		1983		40		380		1,521		265		380		1,787		2,167		(427	)		1,740		1,609
Wah Luck House	High Rise	Jan-06	Washington, DC		1982		153		—		11,198		94		—		11,292		11,292		(5,563	)		5,729		10,585
Walhalla Gardens II	Garden	Jan-06	Walhalla, SC		1972		36		16		973		25		16		998		1,015		(674	)		341		138
Walnut Hills	High Rise	Jan-06	Cincinnati, OH		1983		198		693		10,344		40		693		10,385		11,078		(5,319	)		5,759		6,787
Wasco Arms	Garden	Mar-02	Wasco, CA		1982		78		625		2,519		685		625		3,205		3,830		(790	)		3,040		3,126
Washington Square West	Mid Rise	Sep-04	Philadelphia, PA		1982		132		555		11,169		4,912		555		16,081		16,636		(3,348	)		13,288		4,043
West 135th Street	Mid Rise	Dec-97	New York, NY		1979		198		1,212		8,031		4,795		1,212		12,826		14,038		(5,016	)		9,022		13,626
Westminster Oaks	Town Home	Jan-06	Springfield, VA		1982		50		—		3,517		139		—		3,657		3,657		(1,707	)		1,950		1,147
Westwood Terrace	Mid Rise	Mar-02	Moline, IL		1976		97		720		3,242		313		720		3,555		4,275		(632	)		3,642		2,084
White Cliff	Garden	Mar-02	Lincoln Heights, OH		1977		72		215		938		284		215		1,222		1,437		(325	)		1,112		1,019
Whitefield Place	Garden	Apr-05	San Antonio, TX		1980		80		223		3,151		2,477		223		5,628		5,851		(902	)		4,949		1,981
Wickford	Garden	Mar-04	Henderson, NC		1983		44		247		946		37		247		983		1,231		(246	)		985		736
Wilderness Trail	High Rise	Mar-02	Pineville, KY		1983		124		1,010		4,048		292		1,010		4,339		5,349		(711	)		4,639		4,664
Wilkes Towers	High Rise	Mar-02	North Wilkesboro, NC		1981		72		410		1,680		423		410		2,103		2,513		(375	)		2,138		1,888
Willowwood	Garden	Mar-02	North Hollywood, CA		1984		19		1,051		840		125		1,051		965		2,016		(178	)		1,838		1,099
Winnsboro Arms	Garden	Jan-06	Winnsboro, SC		1978		60		71		1,898		48		71		1,946		2,017		(1,325	)		692		362
Winter Gardens	High Rise	Mar-04	St Louis, MO		1920		112		300		3,072		4,322		300		7,394		7,694		(629	)		7,065		3,965
Woodcrest	Garden	Dec-97	Odessa, TX		1972		80		41		229		297		41		526		567		(410	)		156		449

F-57


								(2)				(3)		December 31, 2006
		(1)						Initial Cost				Cost Capitalized								Accumulated			Total Cost
	Property	Date		Year		Number				Buildings and		Subsequent to				Buildings and				Depreciation			Net of
Property Name	Type	Consolidated	Location	Built		of Units		Land		Improvements		Acquisition		Land		Improvements		Total		(AD)			AD		Encumbrances

Woodland	Garden	Jan-06	Spartanburg, SC		1972		100		182		663		1,100		182		1,763		1,945		(184	)		1,762		332
Woodland Hills	Garden	Oct-05	Jackson, MI		1980		125		541		3,875		3,110		326		7,199		7,526		(490	)		7,036		—
Yadkin	Mid Rise	Mar-04	Salisbury, NC		1912		67		242		1,982		283		242		2,265		2,507		(809	)		1,698		1,841


Total Affordable Properties							27,875		126,227		1,148,893		233,478		125,621		1,382,978		1,508,599		(488,485	)		1,020,114		798,982


Other (4)									1,005		4,791		523		1,004		5,314		6,318		(2,584	)		3,734


							162,432	$	2,372,921	$	7,491,381	$	2,118,183	$	2,420,948	$	9,561,537	$	11,982,485	$	(2,901,267	)	$	9,081,218	$	6,265,093


(1)		Date we acquired the property or first consolidated the partnership which owns the property.

(2)		Initial cost includes the tendering costs to acquire the minority interest share of our consolidated real estate partnerships.

(3)		Costs capitalized subsequent to acquisition includes costs capitalized since acquisition or first consolidation of the partnership/property.

(4)		Other includes land parcels and commercial properties.

F-58

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

REAL ESTATE AND ACCUMULATED DEPRECIATION
For the Years Ended December 31, 2006, 2005 and 2004
(In Thousands)


	2006			2005			2004

Real Estate
Balance at beginning of year	$	10,198,524		$	9,327,670		$	8,470,451
Additions during the year:
Newly consolidated assets(1)		1,146,086			260,715			277,580
Acquisitions		184,986			288,212			393,088
Foreclosures		—			—			2,022
Capital expenditures		485,758			436,781			301,937
Deductions during the year:
Casualty and other write-offs		(21,192	)		(18,872	)		(13,869	)
Assets held for sale reclassification(2)		(11,677	)		(95,982	)		(103,539	)

Balance at end of year	$	11,982,485		$	10,198,524		$	9,327,670

Accumulated Depreciation
Balance at beginning of year	$	2,009,286		$	1,655,220		$	1,391,353
Additions during the year:
Depreciation		468,186			412,701			346,156
Newly consolidated assets(1)		452,824			40,277			(31,208	)
Deductions during the year:
Casualty and other write-offs		(5,604	)		(3,191	)		(4,038	)
Assets held for sale reclassification(2)		(23,425	)		(95,721	)		(47,043	)

Balance at end of year	$	2,901,267		$	2,009,286		$	1,655,220


(1)		Includes acquisition of limited partnership interests and related activity.

(2)		Represents activity on properties that have been sold or classified as held for sale that is included in the line items above.

F-59

EXHIBIT INDEX


Exhibit No.			Description

	2	.1	Agreement and Plan of Merger, dated as of December 3, 2001, by and among Apartment Investment and Management Company, Casden Properties, Inc. and XYZ Holdings LLC (Exhibit 2.1 to Aimco’s Current Report onForm 8-K, filed December 6, 2001, is incorporated herein by this reference)
	3	.1	Charter (Exhibit 3.1 to Aimco’s Quarterly Report onForm 10-Q for the quarterly period ended June 30, 2006, is incorporated herein by this reference)
	3	.2	Bylaws (Exhibit 3.2 to Aimco’s Quarterly Report onForm 10-Q for the quarterly period ended March 31, 2001, is incorporated herein by this reference)
	10	.1	Fourth Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 29, 1994 as amended and restated as of February 28, 2007
	10	.2	Amended and Restated Secured Credit Agreement, dated as of November 2, 2004, by and among Aimco, AIMCO Properties, L.P., AIMCO/Bethesda Holdings, Inc., and NHP Management Company as the borrowers and Bank of America, N.A., Keybank National Association, and the Lenders listed therein (Exhibit 4.1 to Aimco’s Quarterly Report onForm 10-Q for the quarterly period ended September 30, 2004, is incorporated herein by this reference)
	10	.3	First Amendment to Amended and Restated Secured Credit Agreement, dated as of June 16, 2005, by and among Aimco, AIMCO Properties, L.P., AIMCO/Bethesda Holdings, Inc., and NHP Management Company as the borrowers and Bank of America, N.A., Keybank National Association, and the Lenders listed therein (Exhibit 10.1 to Aimco’s Current Report onForm 8-K, dated June 16, 2005, is incorporated herein by this reference)
	10	.4	Second Amendment to Amended and Restated Senior Secured Credit Agreement, dated as of March 22, 2006, by and among Aimco, AIMCO Properties, L.P., and AIMCO/Bethesda Holdings, Inc., as the borrowers, and Bank of America, N.A., Keybank National Association, and the lenders listed therein (Exhibit 10.1 to Aimco’s Current Report onForm 10-K, dated March 22, 2006, is incorporated herein by this reference)
	10	.5	Master Indemnification Agreement, dated December 3, 2001, by and among Apartment Investment and Management Company, AIMCO Properties, L.P., XYZ Holdings LLC, and the other parties signatory thereto (Exhibit 2.3 to Aimco’s Current Report onForm 8-K, filed December 6, 2001, is incorporated herein by this reference)
	10	.6	Tax Indemnification and Contest Agreement, dated December 3, 2001, by and among Apartment Investment and Management Company, National Partnership Investments, Corp., and XYZ Holdings LLC and the other parties signatory thereto (Exhibit 2.4 to Aimco’s Current Report onForm 8-K, filed December 6, 2001, is incorporated herein by this reference)
	10	.7	Limited Liability Company Agreement of AIMCO JV Portfolio #1, LLC dated as of December 30, 2003 by and among AIMCO BRE I, LLC, AIMCO BRE II, LLC and SRV-AJVP#1, LLC (Exhibit 10.54 to Aimco’s Annual Report onForm 10-K for the year ended December 31, 2003, is incorporated herein by this reference)
	10	.8	Employment Contract executed on July 29, 1994 by and between AIMCO Properties, L.P. and Terry Considine (Exhibit 10.44C to Aimco’s Annual Report onForm 10-K for the year ended December 31, 1994, is incorporated herein by this reference)*
	10	.9	Apartment Investment and Management Company 1997 Stock Award and Incentive Plan (October 1999) (Exhibit 10.26 to Aimco’s Annual Report onForm 10-K for the year ended December 31, 1999, is incorporated herein by this reference)*
	10	.10	Form of Restricted Stock Agreement (1997 Stock Award and Incentive Plan) (Exhibit 10.11 to Aimco’s Quarterly Report onForm 10-Q for the quarterly period ended September 30, 1997, is incorporated herein by this reference)*
	10	.11	Form of Incentive Stock Option Agreement (1997 Stock Award and Incentive Plan) (Exhibit 10.42 to Aimco’s Annual Report onForm 10-K for the year ended December 31, 1998, is incorporated herein by this reference)*


Exhibit No.			Description

	21	.1	List of Subsidiaries
	23	.1	Consent of Independent Registered Public Accounting Firm
	31	.1	Certification of Chief Executive Officer pursuant to Securities Exchange ActRules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	31	.2	Certification of Chief Financial Officer pursuant to Securities Exchange ActRules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	32	.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	32	.2	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	99	.1	Agreement re: disclosure of long-term debt instruments


(1)		Schedule and supplemental materials to the exhibits have been omitted but will be provided to the Securities and Exchange Commission upon request.

(2)		The file reference number for all exhibits is001-13232, and all such exhibits remain available pursuant to the Records Control Schedule of the Securities and Exchange Commission.

*		Management contract or compensatory plan or arrangement

Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability	H.S. sophomore Avg

Apartment Investment and Management (AIV) 10-K2006 FY Annual report

Content analysis